Noodling January 2013

I know it’s the first of February and not the last Friday of January when I usually post my Noodling, but last Friday was crazy and besides I wasn’t interested in posting it. So here are a few interesting things that have passed through my door, they are all wide ranging and far afield.

San Francisco Bay Area Housing:

Housing values for resale homes are up over 25% for all the counties in the region. Here is the report form KCBS on the increase in values, multiple offers over asking, and buyer’s remorse when there is nothing on the market to buy after selling. GO HERE  

And homes that have sold for more than a million buckeroos are also up. For the curious thrill seekers GO HERE.

All of this points to an increasing problem I have noted in previous posts, there is NO forward planning going on in the housing market, especially California. New homes are being built, that’s true, the public builders are building and selling at rates not seen in years – but this is all out of existing mapped lots and finished house pads (some five years old). The problem will become acute in nine to twelve months when these run out. Prices will escalate significantly, and if interest rates are kept artificially low (see Feds), then they will explode. Be warned.

Electric Cars

I have supported the idea of electric cars, especially in the urban market. But I don’t support the Fed’s and their Robin Hood dreams of using tax incentives, grants, and loans to “make” us want a product. Sales are lack luster to say the most GO HERE, and even after throwing together all the hybrids, plug-ins, and all-electric into one stat, they only amount to 3.3% of total automobile sales. Someone get a clue. Every major industry has their hands out for federal money (incipient socialism), recipients of grants and loans are failing and declaring bankruptcy (guess who pays?), airports are canceling free parking for electrics, and gas prices are (temporarily) falling. The market is a tough place to understand – but it always speaks the truth, whether you like it or not. If the Feds were to get out of the way and let the market actually react to the product, it might have a chance.

And lastly:

A cool urban video, enjoy.

Toronto: City Rising

And an interesting one on high speed trains in Europe with a very good narrative – Barcelona to Paris, my guess is that it was sponsored by the California High Speed Rail Authority!

Stay Tuned . . . . . . .

The Electric Dream Car

I have, over the last nine months, challenged the fundamentals of the electric car on one specific issue, its viability in a world of inexpensive gasoline. And now there is one more issue to deal with, the unquestionable silliness of Washington to force feed the car (esp. the American version) down the throats of the American consumer. Patrick Michaels points out, in a Forbes article about the Chevy Volt, its debut is nothing more than a sham and if you and I were to proceed the way GM has, I suggest that we would be sharing a hall with Bernie Madoff.

And yes, gasoline is still inexpensive. Germans pay about $5.60 for a gallon (last month), but a good chunk of it above $4.00 is taxes. They seem to survive.

I have no sympathy for a product that does not meet the needs and expectations of the marketplace. Every year thousands of products, inventions, toys and all sorts of things are designed, manufactured, marketed and then offered to the public. Most fail.

The alleys of the marketing world are littered with great ideas, the Edsel, New Coke, Microsoft’s Zune, Microsoft WebTV, Apple’s Newton, the DeLoren, Sony Betamax, the USFL, Charlie Sheen, and the list goes on.

The Volt, and other such pretentious products, will have to meet the measure of the consumer, and no matter how it’s presented. If it doesn’t, it will and deserves to, fail. Pumping the marketplace with subsidies, tax credits, tax refunds, and free chargers will not prop up a disaster. Sure its price is high, $41,000 sticker (just try and find one at that price), which is $17,500 over the price of a Ford Focus-SFE(40 mpg), that will get you essentially 175,000 free miles for the difference, even with $4.00 gas. And the Volt STILL uses gasoline to push you down the highway. Maybe it should be renamed the Chevy Gas.

My problem is with the use of public funds to support, what is essentially, a United States government owned company (U.S., not the non-capitalized us). There are so many other uses to waste money on, why the rabid focus on just this?

I firmly believe there is an all-electric American car in the urban future, but it has to compete with all the other competitive transportation products, both electric and hybrid, out there and soon coming down your street. The Tesla looks interesting, the Fisker Karma is dramatic, the Nissan Leaf is tailpipeless, and soon there will be others. But even these will get the tax savings – at least for a while. Remember the hybrid’s use of HOV lanes in California, what gov gives – gov takes.

But the future is a little dusty right now. Will there be the power generation needed to help fill the batteries of these little beasties? What is the future of nuclear power? How will these personal transportation devices compete for juice with the giant sucking sound of high-speed rail in the future? I don’t know, and neither does anyone else. I’m just getting a little tired of paying for someone else’s toys.