syntech finance blog http://www.syntechfinancial.com all that is new from the finance sector... Thu, 11 Mar 2010 00:14:00 +0000 http://wordpress.org/?v=2.7.1 en hourly 1 Fly ‘n’ Blog http://www.syntechfinancial.com/fly-%e2%80%98n%e2%80%99-blog/ http://www.syntechfinancial.com/fly-%e2%80%98n%e2%80%99-blog/#comments Thu, 11 Mar 2010 00:10:06 +0000 admin

Remember in the old days when people would call from their cars with their new cell phones, just to demonstrate that it could be done? Anthony Gregory is blogging during his flight on his way to the Austrian Scholars Conference – just to show that it can be done.

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    ]]>     http://www.syntechfinancial.com/fly-%e2%80%98n%e2%80%99-blog/feed/     Top Selling Investment Books http://www.syntechfinancial.com/top-selling-investment-books/ http://www.syntechfinancial.com/top-selling-investment-books/#comments Wed, 10 Mar 2010 20:10:12 +0000 admin According to Amazon (AMZN), these are the top selling books in the Investing - Stocks category:

    The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) ~ by Jason Zweig, Benjamin Graham, Warren E. Buffett

    The Investor’s Manifesto: Preparing for Prosperity, Armageddon, and Everything in Between ~ by William J. Bernstein

    How to Make Money in Stocks: A Winning System in Good Times and Bad, Fourth Edition ~ by William O’Neil

    Jim Cramer’s Getting Back to Even ~ by James J. Cramer, Cliff Mason

    The Neatest Little Guide to Stock Market Investing ~ by Jason Kelly

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    ]]>     http://www.syntechfinancial.com/top-selling-investment-books/feed/     Searching for Lost Value http://www.syntechfinancial.com/searching-for-lost-value/ http://www.syntechfinancial.com/searching-for-lost-value/#comments Wed, 10 Mar 2010 19:53:40 +0000 admin http://www.syntechfinancial.com/searching-for-lost-value/

    The Associated Press reports that Toyota faces a plethora of class action lawsuits from its customers – not because people suffered physical injuries from defective cars, but because the cars have “lost” value:

    Such class-action lawsuits “are more scary for Toyota than the cases where people actually got injured,” said Tom Baker, a University of Pennsylvania law professor. “A super-big injury case would be $20 million. But you could have millions of individual car owners who could (each) be owed $1,000. If I were Toyota, I’d be more worried about those cases.”

    [ . . . ]

    Toyota owners suing the company contend their vehicles have dropped in value because of the recalls and that Toyota knew all along about safety problems but concealed them from buyers. They point to evidence such as Kelley Blue Book’s decision this month to lower the resale value of recalled Toyotas an average of 3.5 percent, ranging from $300 less for a Corolla to $750 less for a Sequoia.

    The idea that a customer has “rights” in the value of a good — as opposed to the right to simply posses a good — is a tent-pole of modern consumerist philosophy. We see this same reasoning in antitrust, where customers have a “right” to expect a certain price level. And it’s a key component of the real estate cycle, as consumers are told not to merely purchase housing, but to “invest” in “building equity” via 30-year mortgages. The customer is taught to look at value as tangible, objective, and an entitlement.

    The state has embraced consumerist thinking because it’s an excellent vehicle for decoupling judicial power from the traditional concept of fraud. Libertarians acknowledge fraud as a form of theft. But it’s a constrained definition. The victim must show he has been deprived of his property without consent. Certainly, consent may be conditioned on certain warranties as to a good’s condition and usability. But the indeterminate future value of a good is not a normal condition or warranty. That is precisely because value is always subjective, and as the immediate seller, I cannot “guarantee” you will be able to resell the good x years in the future for y dollars.

    But what if a seller did make such a “guarantee”? He would still not have committed fraud in the ordinary sense, because the customer still cannot reasonably rely on such a promise. The customer who feels entitled to a future resale value is, quite frankly, an imbecile. “A” cannot hold “B” liable because at some future point, there is no “C” who will agree to pay a certain amount for a good that “B” previously sold to “A.”

    Of course, the cases against Toyota are unlikely to alleged the company itself made any such claims about resale value. As the AP article notes, the principle “evidence” of lost value to date is the Kelley Blue Book’s decision to lower its own estimates of resale prices. But the Blue Book is nothing more than a third party’s opinion: “A” cannot hold “B” liable just because “C” states an opinion that the good B sold A might be worth less than B assumed.

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    ]]>     http://www.syntechfinancial.com/searching-for-lost-value/feed/     Double-Digit Double-Jeopardy http://www.syntechfinancial.com/double-digit-double-jeopardy/ http://www.syntechfinancial.com/double-digit-double-jeopardy/#comments Wed, 10 Mar 2010 18:10:09 +0000 admin Today’s Regional and State Employment and Unemployment report showed that in January 15 states and the District of Columbia were experiencing double digit unemployment with a median unemployment rate of 11.2%.

    Michigan remained the state with the highest unemployment rate at 14.3% followed by Nevada at 13.0% and Rhode Island at 12.7%.

    As you can see from the chart below, since late 2008 states registering double digit unemployment rates have been rising steadily.

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    ]]>     http://www.syntechfinancial.com/double-digit-double-jeopardy/feed/     Yevgeny Zamyatin: Libertarian Novelist http://www.syntechfinancial.com/yevgeny-zamyatin-libertarian-novelist/ http://www.syntechfinancial.com/yevgeny-zamyatin-libertarian-novelist/#comments Wed, 10 Mar 2010 16:15:01 +0000 admin http://www.syntechfinancial.com/yevgeny-zamyatin-libertarian-novelist/

    When we think of the libertarian tradition, we tend naturally to think of political philosophers and economists of the past. But one part of the libertarian tradition belongs to novelists and other fiction writers. FULL ARTICLE by Jeff Riggenbach

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    ]]>     http://www.syntechfinancial.com/yevgeny-zamyatin-libertarian-novelist/feed/     Defense Spending Topping Out? http://www.syntechfinancial.com/defense-spending-topping-out/ http://www.syntechfinancial.com/defense-spending-topping-out/#comments Wed, 10 Mar 2010 15:53:42 +0000 admin The latest read of defense investment shows that real expenditures grew at nearly the slowest annual rate in a decade possibly indicating that defense spending may be entering a period of slowing or contraction.

    In nominal terms, national defense consumption expenditures and gross investment was $793.8 billion in Q3 2009, a 113% increase over the same period in 2000, a decade long run of robust defense spending.

    Now though, we may be seeing the early signs of a period of an oncoming contraction in defense spending with real expenditures registering only a tepid 2.2% increase on a year-over-year basis.

    With the weak domestic economy and some military operations possibly nearing an end-game it will be interesting to watch the trend of this significant component of government spending over the next several years.

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      ]]>       http://www.syntechfinancial.com/defense-spending-topping-out/feed/       Reading Rates: MBA Application Survey – March 10 2010 http://www.syntechfinancial.com/reading-rates-mba-application-survey-%e2%80%93-march-10-2010/ http://www.syntechfinancial.com/reading-rates-mba-application-survey-%e2%80%93-march-10-2010/#comments Wed, 10 Mar 2010 14:01:40 +0000 admin The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughlyಲ percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages, 1 year ARMs as well as application volume for both purchase and refinance applications.

      The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

      The latest data is showing that the average rate for a 30 year fixed rate mortgage increased 6 basis points since the last week to 5.01% while the purchase application volume increased 5.7% and the refinance application volume declined 1.5% over the same period.

      It’s important to recognize that despite the Federal Reserve’s “quantitative easing” measures, record low interest rates and the massive government housing tax gimmick, the purchase application volume now sits near the lowest reading seen in over ten years.

      The following chart shows how the principle and interest cost and estimated annual income required to cover the PITI (using the 29% “rule of thumb”) on a $400,000 loan has changed since November 2006.

      The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages over the last number of weeks (click for larger version).


      The following charts show the Purchase Index, Refinance Index and Market Composite Index since November 2006 (click for larger versions).



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        ]]>         http://www.syntechfinancial.com/reading-rates-mba-application-survey-%e2%80%93-march-10-2010/feed/         Apple using HTC suit against competitors http://www.syntechfinancial.com/apple-using-htc-suit-against-competitors/ http://www.syntechfinancial.com/apple-using-htc-suit-against-competitors/#comments Wed, 10 Mar 2010 06:10:06 +0000 admin

        Last week I wrote:

        Full-out patent war against an equally matched competitor means mutually assured destruction … so large companies inevitably settle and use their patents to keep new innovators out.

        As if to prove my point, Fortune quotes Oppenheimer’s Yair Reiner who says that is exactly what is happening:

        Starting in January, Apple launched a series of C-Level discussions with tier-1 handset makers to underscore its growing displeasure at seeing its iPhone-related IP [intellectual property] infringed. The lawsuit filed against HTC thus appears to be Apple’s way of putting a public, lawyered-up exclamation point on a series of blunt conversations that have been occurring behind closed doors.

        “Our checks also suggest that these warning shots are meaningfully disrupting the development roadmaps for would-be iPhone killers. Rival software and hardware teams are going back to the drawing board to look for work-arounds. Lawyers are redoubling efforts to gauge potential defensive and offensive responses. And strategy teams are working to chart OS strategies that are better hedged.”

        The winner in this battle is not just Apple, but any market leader with patent portfolios to back up their products:

        Our checks indicate that Microsoft has been quick to sniff out this burgeoning opportunity and has begun to aggressively promote the strength of its own IP portfolio, as well as its willingness to join battle with customers that come under IP attack.

        If you believe that Apple’s patents are justified, I suppose you think that all this is just justice being done. As someone who works in the mobile application development market, I respectfully disagree and offer two observations:

        If the purpose of patents is to encourage inventors to introduce new products to market, why do they always seem to end up being used by market leaders to keep new competitors out?

        Visit an AT&T, Sprint, or Verizon store near you. Are the Android, and Palm phones merely clones of market leaders Apple, Microsoft of Blackberry? Or do they all advance the state of the art? Their designs are the result of extensive (and expensive) research. Yes, to some extent, insights that were introduced by Apple have been incorporated in the next generation. But those insights are ideas whose time has come, much as Apple spearheaded, but did not invent the graphical user interface. This process is happening within one-two year cycles, not the 20 year monopoly granted by patents. If patents were enforced with complete effectiveness, we’d all be using 1990-era phones. How would that serve inventors?

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        ]]>         http://www.syntechfinancial.com/apple-using-htc-suit-against-competitors/feed/         The Great Burger Battle http://www.syntechfinancial.com/the-great-burger-battle/ http://www.syntechfinancial.com/the-great-burger-battle/#comments Tue, 09 Mar 2010 21:53:16 +0000 admin

        Sports bore me but I can’t get enough of the great burger battle. McDonald’s reported sales increases of 4.8 last month. Most of the increases are overseas but it is no surprise that its domestic sales are solid as can be.

        Their new coffees, which now include frozen drinks, are a close competitor to Starbucks, and in buying them you don’t have to endure a lecture about how you are doing your part to save the planet.

        For breakfast, you can get a traditional biscuit or croissant with sausage or move into the new line that includes a fruit parfait for a buck (how is this possible?) or an apple-walnut salad. This stuff is amazing.

        And I would compare their Angus burger next to any hamburger in a fancy restaurant that costs twice as much.

        This is a company that knows how to market, how to adapt, how to change. And in my town, the McDonald’s is the happiest place around. They offer wi-fi and smiling employees who are quick with a quip and a smile. The place is full of energy and life and is teeming with the sense of progress.

        Meanwhile, Burger King’s sales slipped 8.2% in January and February. Corporate headquarters blames bad weather. They ought to be looking more carefully at their menu. They are only now catching up to the wonderful Angus Burger with a new offering called a steakburger or something like that. But even now, they lack the coffees and fruity breakfast choices.

        Still, there is something to admire about both companies. They are responsive to the consumer, and the employees at both places must deal with the most demanding consumers you can imagine. If only one thing goes wrong, they are going to hear about it. People demand more ketchup than they will use, fill up their drinks eight times, and start yelling if the meal they ordered doesn’t appear in 10 seconds.

        To be sure, there is a strange way in which Burger King is the benefactor of McDonalds and visa versa. The existence of competition inspires emulation (good!) and the striving for excellence (good!) and an overall increase in the demand for the product they both offer. So, yes, they are competitors but they are also cooperators in a great industry.

        It always amazes me how demanding Americans can be toward private enterprise. Everything must be 100% correct or the customer flips out. But put these same people in line at the post office or the customs line at the airport and they become complacent slaves doing everything they are told. They don’t even complain about it.

        It’s as if our expectations are different and we are okay with that. We expect the government to be slow, rude, abusive, unreasonable, and unresponsive and we adapt ourselves to that and figure that this is what is necessary for security or the general welfare or whatever. We let them have our money and our lives and call it a day.

        But when we enter private businesses, we have the opposite way about us. Everything must go our way. We suffer no fools. We demand to speak to the management right now! and so on. Yes, it is bizarre, but it is part of the socialization we endure in our mixed economic system. We live double lives – one for the real economy and one for the phony economy.

        One nice step would be to at least allow the same level of competition in public services that we have in private services. Where is the McDonalds vs. the Burger King when it comes to the Customs Bureau or the Courthouse? It would not be a real market but at least it would interject some life into this static world of the public sector. And yet, it remains as Mises said: there is no real competition without prices and private property. All the rest is just playing market. The burger companies are struggling every day to get ahead. It is a glorious thing to see, and a model for the way the entire world ought to work.

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          ]]>           http://www.syntechfinancial.com/the-great-burger-battle/feed/           With LvMI closing in on 20,000 friends http://www.syntechfinancial.com/with-lvmi-closing-in-on-20000-friends/ http://www.syntechfinancial.com/with-lvmi-closing-in-on-20000-friends/#comments Tue, 09 Mar 2010 19:58:51 +0000 admin

          Facebook has decided it better ramp up a larger data storage facility in Prineville, Oregon. According to the Wall Street Journal, the company will spend $175 million building 145,000sf over the next three years. Facebook paid $3 million for the 124 acres last year, so the lion’s share is going into the building–almost $1,200/sf.

          That cost per square foot is reminiscent of high-rise condo prices per square foot at the top of the housing bubble.

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