1. Supply. Nationwide, lenders are sitting on a backlog of approximately 1 million foreclosed homes.  Under pressure from Uncle Sam, and in the interest of minimizing their own losses, they’ve only been releasing a few at a time.  As a result, the current supply of for-sale homes is incredibly (and artificially) low.  If this huge volume of foreclosures were to somehow break loose and flood the market, prices would fall sharply.

2. Demand. For the past year, the government has been artificially inflating demand with low-down payment loans and generous tax credits.  The tax credit offer expires April 30th.  Without that incentive, demand will drop and prices could fall.  In the car business, this is known as “incentive hangover;” you might sell a lot of cars during “cash for clunkers” or “employee pricing,” but the next few months are going to be rough.  Will they let it expire, or extend it again?

3. The Price of Money.  Interest rates remain near historic lows.  Any increase in interest rate reduces the borrowing power of would-be buyers.  On a $300,000 loan, a 1% increase in interest rate can raise the cost by around $200 per month, which obviously limits how much house potential buyers can afford.  Many so-called experts think that interest rates will rise in the near term, pushing prices lower.  Of course, only cash buyers benefit from an interest-rate-increase-caused price drop.  For everyone else, the sticker price may be lower, but the carrying cost remains the same.

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She is a rare and valuable family heirloom that is being transported to southern California.  We took her the first part of her journey on our drive back from Seattle.  Unfortunately we don’t have much space, so she’s been guarding the washer and dryer this week.  It would have been great to put her right in the living room and watch people’s reactions to our new decor.

I think someone is coming to get her this weekend to take her the rest of the way to her new home.  She’ll be missed.

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• They don’t understand how the freeway works
• They’re suicidal
• They want to save gas

I want to rule out the first two by assuming that at least 99.9% of the driving population has driven on the freeway before AND would like to live through the day.  Which mean the only possible reason left for slow merging is to save gas.

And to that reason, I ask: is it worth it?

Let’s say Mr. Slow Merger is driving his Prius and likes to go 0-60 in about a quarter mile to maximize fuel economy.  By doing so, he enters the freeway at about 40 mph, rather than the 65 mph speed-of-traffic.  This puts himself in great physical danger of getting run over by a semi, creates a mini traffic-jam behind him, and screws up the ability of other cars on the on-ramp to merge efficiently.

Let’s say you have a 528 foot on-ramp (.1 miles).  On a slow acceleration to freeway speed, let’s say the Prius gets 30 mpg, but it takes .2 miles to reach 65 mph.  To accelerate for that distance, the car uses .006 gallons (1/150th of a gallon).  At $3 a gallon, a slow merge costs $0.02.

But how much would it cost to do it right?  Let’s say the Prius gets 15 mpg on a fast acceleration, and reaches freeway speed in the .1 mile length of the on-ramp.  To travel half the distance at half the efficiency, the Prius uses an identical 1/150th of a gallon.  What?!  At $3 a gallon, a “fast” merge costs the same: $0.02.  And it was probably more fun.

But wait, what about the next .1 mile that the slow merger already covered?  Well Mr. Fast Merger gets to drive that distance at highway fuel efficiency — an EPA estimated 48 mpg.  So it takes him .002 gallons (1/480th of a gallon), or $0.00625.

So for 6/10ths of a penny — 28 cents a month if you commute 22 days and take the freeway to and from work — you risk life and limb of yourself and fellow mergers, and slow traffic for everyone else.  I’d say that’s selfish, but mostly it’s just dumb.  So step on it!

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That was the headline on a marketing piece I received from Citibank, advertising their own checking account that rewards users “Thank You” points.  Come to think of it, my account with WaMu/Chase is “point-less.”

The headline works because:

• Everyone has a checking account
• Checking accounts are considered “practical,” not “pointless.”
• The bold statement seemingly contradicts that conventional wisdom, which provokes curiosity.
• Offering rewards points for maintaining a checking account is a good way for Citi to differentiate their product in a competitive environment.

And while I didn’t switch banks, I thought it was a great attention-getting headline, and made me want to think about how I could write better ad copy.  “Your shoes are pointless…”

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When an academic or lawyer calls someone “smart,” it is meant as a compliment.  It usually means that the person is good at developing abstractions from a complicated mass of data, is articulate, is able to reason persuasively and often is quick with numbers.

However, when a businessman calls someone “smart,” it is not necessarily a compliment.  While he means the same thing, the term “smart” misses what is important to the businessman: effectiveness.  If good things don’t happen over which the person is responsible, it doesn’t matter how smart the person is; he is ineffective.  I have often heard a businessman describe a manager who he has fired as “really smart.”  So don’t try to be smart; try and be effective.

And obviously he’s not suggesting we be stupid either, but just that “smart-ness” alone doesn’t deliver results.  And results are what matters, whether you’re trying to save the world, build a business, or both.

It also reminds me of a conversion I had with Chris a long time ago discussing someone with good grades.  I, perhaps mistakenly, said the student was “smart.”  Chris sought clarification: “Is she smart, or does she work hard?”  Not that someone can’t be both smart and hard-working, but his argument was that in terms of getting good grades (effective results) in high school, either one of the two characteristics would suffice.

Time to go be effective.

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Now I have a minimum of 6 tabs open at all times, and have been known to run Firefox, IE, and Chrome simultaneously for serious business.  But thanks to the tabs, my task bar is not the cluttered mess it once was.

It’s the little things.

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I know buddy, yawn it out.  March is booked.  April and May too.

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We should have a caption contest for what Mochi is thinking.

“Hit the whammy bar, mom.”

“Star power READY!”

“OK, my turn.”

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