Wal-Mart Tests New Hybrid Trucks, Alternative Fuels

Sunday, February 8th, 2009

Wal-Mart is testing two new hybrid trucks and two new alternative-fuel trucks:

  • A full-propulsion Arvin Meritor hybrid that will initially operate in the Detroit area. This dual-mode diesel-electric hybrid is believed to be the first vehicle of its type;
  • Fifteen trucks operating in Buckeye, Ariz. distribution center near Phoenix, will be converted to run on Reclaimed Grease FuelTM, made with the waste brown cooking grease from Walmart stores. In addition, the remaining trucks located in the Buckeye distribution center will operate on an 80/20 blend of biodiesel made of reclaimed yellow waste grease;
  • Five Peterbilt Model 386 heavy duty hybrid trucks with diesel-electric hybrid power systems developed by Eaton Corporation and PACCAR, that will be based in Dallas, Houston, Apple Valley, Calif., Atlanta and the Washington/Baltimore regions and;
  • Four Peterbilt Model 386 trucks and one yard truck, which operates only on the distribution center property, will operate on liquid natural gas. These trucks are part of a partnership with the Mojave Air Quality Management District and will operate out of the distribution center in Southern California.

I’m not sure how they’re measuring it, but they plan on doubling fleet efficiency by 2015; they’ve already improved it 25 percent from their 2005 baseline.

Here comes the e-book revolution

Sunday, February 8th, 2009

Here comes the e-book revolution, Mike Elgan says:

At what temperature do electronic books catch fire? We’re going to find out sometime this year. E-book sales are about to ignite.

On Monday, Amazon.com is expected to unveil a new version of its Kindle reader. It will probably be a lot better and a little cheaper than the first version. But the real news already broke this week: A company spokesman announced that Amazon plans to offer Kindle books on cell phones.

This news countered Google’s announcement that the 1.5 million public domain books available on its Google Book Search offering will soon be available (free, of course) via a new cell phone application.

He lists six trends driving this growth, but I have to wonder about his very first trend:

1. The economy. The economy is in the tank, and people are looking to cut costs any way they can. An Amazon Kindle pays for itself after the purchase of 20 or 30 books, then starts paying dividends.

In a bad economy, people are going to make a big up-front expenditure that will pay back after they buy 20 to 30 books?

I found this analysis amusing:

The blog did the math and determined that the New York Times could buy every single subscriber an Amazon Kindle e-book reader, and it would still cost them half as much as it will cost them to send paper newspapers for just one year.

Driven down by debt, Dubai expats give new meaning to long-stay car park

Friday, February 6th, 2009

Driven down by debt, Dubai expats give new meaning to long-stay car park:

For many expatriate workers in Dubai it was the ultimate symbol of their tax-free wealth: a luxurious car that few could have afforded on the money they earned at home.

Now, faced with crippling debts as a result of their high living and Dubai’s fading fortunes, many expatriates are abandoning their cars at the airport and fleeing home rather than risk jail for defaulting on loans.

Police have found more than 3,000 cars outside Dubai’s international airport in recent months. Most of the cars — four-wheel drives, saloons and “a few” Mercedes — had keys left in the ignition.

Some had used-to-the-limit credit cards in the glove box. Others had notes of apology attached to the windscreen.

“Every day we find more and more cars,” said one senior airport security official, who did not want to be named. “Christmas was the worst – we found more than two dozen on a single day.”

When the market collapsed and the emirate’s once-booming economy started to slow down, many expatriates were left owning several homes and unable to pay the mortgages without credit.

“There were a lot of people living the high life, investing in real estate and a lifestyle they couldn’t afford,” one senior banker said.

Under Sharia, which prevails in Dubai, the punishment for defaulting on a debt is severe. Bouncing a check, for example, is punishable with jail. Those who flee the emirate are known as skips.

Electric Motorcycle Promises 150 MPH

Friday, February 6th, 2009

Electric Motorcycle Promises 150 MPH:

Mission Motors unveiled the bike, dubbed Mission One, at the TED conference and said it will begin selling them next year for $69,000 apiece. Although several electric motorcycles have been announced in recent weeks, Mission Motors sticks out because its 12 employees have worked for Tesla, Ducati North America and Intel, and the bike they’re building could set a new benchmark for EVs of all kinds.

“As a motorcycle enthusiast and engineer, I knew I could combine my passion for motorcycles with my passion for innovation and create a motorcycle that truly sets a new standard in the perception of electric vehicles,” company founder and CEO Forrest North said at the Mission One’s launch.

The prototype, wearing bodywork designed by Yves Behar, was designed entirely in-house by Mission Motors. Power comes from a 3-phase AC induction motor and a liquid-cooled lithium-ion battery the company claims delivers 150 miles and recharges in just two hours at 240 volts. That climbs to eight hours at 120 volts.

Top-shelf hardware includes Ohlins suspension at both ends, four-piston Brembo brakes and Marchesini forged wheels. The components — and the claimed 150 horsepower — put the bike on par with hardcore sportbikes like the Ducati 1198. That’s exactly what North had in mind.

“With Mission One, we’re writing the next chapter in motorcycle design, delivering a new riding experience without sacrificing performance or design in a zero emissions vehicle,” he said in a statement.

I don’t see why the makers of an electric vehicle would want to emphasize top speed, when their real strength is off-the-line acceleration.

IBM to build world’s first national smart utility grid

Thursday, February 5th, 2009

IBM to build world’s first national smart utility grid — in Malta:

As with other island states, power and water are intricately linked on Malta. All of the archipelago’s electricity is generated from imported fuel oil while the country depends on energy-intensive desalinization plants for half its water supply. Meanwhile, rising sea levels threaten its underground freshwater supplies.

“About 55% of the cost of water on Malta is related to electricity — it’s a pretty staggering amount,” Guido Bartels, general manager of IBM’s Global Energy & Utilities Industry division, told Green Wombat from Malta on Tuesday.

So how can digitizing the grid help? IBM and its partners will replace Malta’s 250,000 utility meters with interactive versions that will allow Malta’s electric utility, Enemalta, to monitor electricity use in real-time and set variable rates that reward customers that cut their power consumption. As part of the $91 million (€70 million) project, a sensor network will be deployed on the grid — along transmission lines, substations and other infrastructure — to provide information that will let the utility more efficiently manage electricity distribution and detect potential problems. IBM will provide the software that will aggregate and analyze all that data so Enemalta can identify opportunities to reduce costs — and emissions from Malta’s carbon-intensive power plants. (For an excellent primer on smart grids, see Earth2Tech editor Katie Fehrenbacher’s recent story.)

A sensor network will also be installed on the water system for Malta’s Water Services Corporation. “They’ll indicate where there is water leakage and provide better information about the water network,” says Robert Aguilera, IBM’s lead executive for the Malta project, which is set to be completed in 2012. “The information that will be collected by the system will allow the government to make decisions on how to save money on water and electricity consumption.”

Cutting the volume of water that must be desalinated would, of course, reduce electricity use in the 122-square-mile (316-square-kilometer) nation.

Microsoft’s primary failing

Thursday, February 5th, 2009

Microsoft’s primary failing, Cringely says, is technical arrogance:

Some of this is native and some is a vestige of Redmond’s long association with IBM. Taking the IBM connection first, let’s look at something current Microsoft CEO Steve Ballmer said in my 1996 PBS documentary, Triumph of the Nerds:
“In IBM there’s a religion in software that says you have to count KLOCs (pronounced KAY-lock), and a KLOC is a thousand lines of code. How big a project is it? Oh, it’s sort of a 10 KLOC project. This is a 20 KLOCer. And this is 5O KLOCs. And IBM wanted to sort of make it the religion about how we got paid. How much money we made off OS/2, how much they did. How many KLOCs did you do? And we kept trying to convince them — hey, if we have — a developer’s got a good idea and he can get something done in 4 KLOCs instead of 20K-LOCs, should we make less money? Because he’s made something smaller and faster, less KLOCs. KLOCs, KLOCs, that’s the methodology. Ugh!”

While Microsoft learned a lot from IBM, this whole KLOC-orientation and associated ass-backward reward scheme repulsed them because it led to bloated code. So just like a child who grows to ultimately emulate or rebel against parental examples, Microsoft shunned the KLOC and embraced the power of tight code. And though it might surprise you from looking at their current product lines, they still do.

The way a company that prides itself on tight code can build something as floppy (in every sense) as Windows Vista is because Vista is simply too big for any one Microsoft executive or engineer to understand in detail. So they embrace the idea that piling lots of chunks of tight code somehow won’t turn into a huge steaming mass of not-very-tight product. But it does.

But wait, there’s more! Somehow this mistaking fat for muscle became institutionalized at Microsoft through a unique group of people called Program Managers or PMs. This is a Microsoft invention intended to make their products more useful and elegant, yet in practice the PMs do just the opposite.

Program Managers at Microsoft are the advocates for software usability. They link (or are supposed to link) to the rest of the company development, usability and testing. They write specs and try to optimize the user experience, though with only limited success.

The bloated development, test, and PM teams across the company are a sign of Microsoft’s obsession with technology and all things technical. There aren’t nearly enough usability engineers, designers, writers, editors, and other people who worry about how usable the software actually is. In other words, like the people who run the feature teams at Apple.

A Microsoft designer once said that the biggest difference between Apple and Microsoft was that at Apple designers usually owned the product features, while at Microsoft, PMs always own the features. And most of the PMs at Microsoft are highly technical, often with computer science degrees. This is considered a good thing, by the way, but it isn’t good at all. It means the PMs tend to lean in favor of the developers just as management leans in favor of the developers, too. So in most cases where usability goes head-to-head with development, usability loses. And so do users.

The answer for Microsoft is not to blindly copy Apple because Microsoft will never BE Apple and will never have a Steve Jobs as boss. The answer is to adopt a similar product design philosophy to Apple’s with the focus squarely on usability.

This will not happen EVER with the present culture at Microsoft.

Life at Wal-Mart

Wednesday, February 4th, 2009

Charles Platt explores Life at Wal-Mart:

How did I move from being a senior writer at Wired magazine to an entry-level position in a company that is reviled by almost all living journalists?

It started when I read Nickel and Dimed, in which Atlantic contributor Barbara Ehrenreich denounces the exploitation of minimum-wage workers in America. Somehow her book didn’t ring true to me, and I wondered to what extent a preconceived agenda might have biased her reporting. Hence my application for a job at the nearest Wal-Mart.

Getting in was not easy, as more than 100 applicants were competing for fewer than 10 job openings. Still, I made it through a very clever screening quiz, then through a series of three interviews, followed by two days of training. I felt ambivalent about taking advantage of the company’s resources in this way, but I was certainly willing to do my part by working hard at the store, at least for a limited period.

The job was as dull as I expected, but I was stunned to discover how benign the workplace turned out to be. My supervisor was friendly, decent, and treated me as an equal. Wal-Mart allowed a liberal dress code. The company explained precisely what it expected from its employees, and adhered to this policy in every detail. I was unfailingly reminded to take paid rest breaks, and was also encouraged to take fully paid time, whenever I felt like it, to study topics such as job safety and customer relations via a series of well-produced interactive courses on computers in a room at the back of the store. Each successfully completed course added an increment to my hourly wage, a policy which Barbara Ehrenreich somehow forgot to mention in her book.

My standard equipment included a handheld bar-code scanner which revealed the in-store stock and nearest warehouse stock of every item on the shelves, and its profit margin. At the branch where I worked, all the lowest-level employees were allowed this information and were encouraged to make individual decisions about inventory. One of the secrets to Wal-Mart’s success is that it delegates many judgment calls to the sales-floor level, where employees know first-hand what sells, what doesn’t, and (most important) what customers are asking for.

Several of my co-workers had relocated from other areas, where they had worked at other Wal-Marts. They wanted more of the same. Everyone agreed that Wal-Mart was preferable to the local Target, where the hourly pay was lower and workers were said to be treated with less respect (an opinion which I was unable to verify). Most of all, my coworkers wanted to avoid those “mom-and-pop” stores beloved by social commentators where, I was told, employees had to deal with quixotic management policies, while lacking the opportunities for promotion that exist in a large corporation.

Of course, I was not well paid, but Wal-Mart is hardly unique in paying a low hourly rate to entry-level retail staff. The answer to this problem seems elusive to Barbara Ehrenreich, yet is obvious to any teenager who enrolls in a vocational institute. In a labor market, employees are valued partly according to their abilities. To earn a higher hourly rate, you need to acquire some relevant skills.

As for all those Wal-Mart horror stories — when I went home and checked the web sites that attack the company, I found that many of them are subsidized with union money. walmartwatch.com, for instance, is partnered with the Service Employees International Union; wakeupwalmart.com is copyright by United Food and Commercial Workers International Union. Why are unions so obsessed with Wal-Mart? I’m guessing that if the more-than-a-million Wal-Mart employees could be unionized, they would be compelled to contribute at least half a billion dollars per year in union dues.

Platt decided against writing a pro-Wal-Mart book when he realized how futile it would be. No one, after all, wants to promote Adam Shepard’s Scratch Beginnings: Me, $25, and the Search for the American Dream, which describes how people can still make it in the United States if they are willing to live carefully on a budget and work hard:

Somehow that kind of news is never as popular as denunciations of the free market written by professional handwringers such as Barbara Ehrenreich.

Hummer Drivers Get More Tickets

Tuesday, February 3rd, 2009

Hummer Drivers Get More Tickets. A Lot More.

Quality Planning Corp., which helps insurance companies identify risk, surveyed data from 1.7 million drivers and found the Hummer H2 and H3 are the most frequently ticketed vehicles on the road, surpassing even the 565-horsepower Mercedes CLK 63 AMG. At the other end of the spectrum, the Jaguar XJ was the vehicle least likely to attract the attention of Johnny Law.

The study found those who drive the leviathans get 4.63 times as many tickets as the average driver, something the researchers attribute to the feeling of invincibility that comes from driving a rolling bank vault.

I’d like to see how many tickets those Hummer drivers were racking up in their previous rides. After all, people aren’t randomly assigned quasi-military SUVs; they buy them on purpose.

Lullaby Language

Tuesday, February 3rd, 2009

Gerald M. Weinberg (Secrets of Consulting, The Psychology of Computer Programmin, Perfect Software: And Other Illusions about Testing) shares a crazy-enough-to-be-true anecdote from one of his consulting engagements:

The customers were enraged with the IT manager because a new system wasn’t ready on time, and the IT manager was enraged with the customers because they hadn’t delivered some essential information as promised, thus causing the entire project to lag its schedule by four months.

It was over 100 degrees outside, but even hotter inside — emotionally. Jeff, the IT manager, would smack the table and say, “You promised that the component pricing data would be in our hands by February first.”

Penny, the catalog manager, would give him a steely-eyed glare and mutter, “We never promised that. Never!”

“Yes, you did!”

“No, we didn’t.”

And then they would loop back to the beginning, raising the temperature a few degrees.

I thought that the problem-solving would go better if I could cool things down, but all I was hearing was “yes-you-did-no-we-didn’t,” back and forth. I decided to attempt to establish some facts that were not a matter of opinion, so I asked for the original requirements document. Both Penny and Jeff seemed a bit stunned by this reference to data, then Penny recovered and said, “Yes, that will prove my point.”

“No, it will prove my point,” Jeff countered. “Good idea, Jerry. Now we’ll see whose fault this is.”

I was a bit surprised at how readily they each found the document. (Lots of my clients seem to lose requirements documents once a project is under way.) Jeff got his open first, and placed his index finger on the following key line:

The Catalog Department should deliver component pricing data by 1 February to the IT Department.

I thought Penny would find some other statement to “prove” her point, but a few moments later, she had her copy open to the same page, upon which the same sentence was highlighted in DayGlo pink. “There.” She said, triumphantly. “There’s my proof. We never promised to deliver that data that early.”

“Yes you did. It’s perfectly clear, right there. Should deliver by 1 February.”

“Exactly,” Penny countered. “It doesn’t say we will, but only that we should. And we did try. But you computer people apparently don’t appreciate the difficulty of getting every single one of those prices signed off by every person involved.”

Weinberg considers should an example of lullaby language, designed to discourage feedback by putting both the speaker’s and the listener’s minds to sleep.

Bitter Brew

Monday, February 2nd, 2009

The failure of a small cafe is not a question of competence, Michael Idov explains:

It is a sad given. The logistics of a food establishment that seats between 20 and 25 people (which roughly corresponds to the definition of “cozy”) are such that the place will stay afloat — barely — as long as its owners spend all of their time on the job. There is a golden rule, long cherished by restaurateurs, for determining whether a business is viable. Rent should take up no more than 25 percent of your revenue, another 25 percent should go toward payroll, and 35 percent should go toward the product. The remaining 15 percent is what you take home. There’s an even more elegant version of that rule: Make your rent in four days to be profitable, a week to break even. If you haven’t hit the latter mark in a month, close.

A place that seats 25 will have to employ at least two people for every shift: someone to work the front and someone for the kitchen (assuming you find a guy who will both uncomplainingly wash dishes and reliably whip up pretty crepes; if you’ve found that guy, you’re already in better shape than most NYC restaurateurs. You’re also, most likely, already in trouble with immigration services). Budgeting $15 for the payroll for every hour your charming cafe is open (let’s say 10 hours a day) relieves you of $4,500 a month. That gives you another $4,500 a month for rent and $6,300 to stock up on product. It also means that to come up with the total needed $18K of revenue per month, you will need to sell that product at an average of a 300 percent markup.

Mr. Idov, by the way, did open a charming little cafe, and it did fail.

Autonomous Robots Invade Retail Warehouses

Sunday, February 1st, 2009

Autonomous Robots Invade Retail Warehouses — not as terminators, but as docile stock pickers:

Warehouses run by Gap, as well as Zappos and Staples now use autonomous robots to pluck products from their shelves and send them to you.

All the robots are told is where products are located and where they need to go. From there, the robots, which look like massive orange Roombas, figure out the rest. They locate the stack of shelves with the needed product on it, slide beneath the stack to pick it up and then find their own routes from the stacks of stuff to human operators. And they manage to find just the right time to get themselves recharged for five minutes out of every hour.

“It’s a major game-changer. There’s no question about that. You can increase productivity immensely,” said Michael Levans, editorial director for a group of supply-chain trade magazines like Logistics Management. “The Zappos guys claim that from the moment you put your order in and it is submitted to the time the box is on the dock and ready to be put on a truck is 12 minutes.”

The robots, which in the largest distribution center currently number over 500, are built by a small company called Kiva Systems (no relation to the microfinance outfit). In total, they’ve installed more than 1,000 bots at a dozen warehouses and are growing quickly. By the end of this year, they expect single locations to have systems with 1,000 of the machines.

Dreamed up and executed by old M.I.T. buddies, these teams of retail robots presage an automated future in which multiagent robotic systems put computer science theories into practice.
[...]
Kiva robots are different: They’re both autonomous and networked.

What that means for workers in the warehouse is that the Henry Ford-era distribution system of the conveyor belt has been broken into pieces and distributed across the entire operation. Any worker (sometimes called “pickers” in the industry jargon) can ask for anything from anywhere in the warehouse and ship it out.

“Every worker has random access to every product in the warehouse,” Wurman said.

The system adjusts to the nature of the products and workers, too. In a typical setup, the humans are placed around the edges of the room. As the robots pick up loads of products and put them back, they adjust the warehouse for greater efficiency. More popular products end up around the edges of the warehouse while more obscure products, like those acid-washed bell bottoms, end up buried deep in the stacks. The self-tuning nature of the system creates big efficiencies.

“We find that it’s two to four times more efficient [than the average warehouse],” said Wurman. “A big chunk of the benefit comes from the fact that we’ve eliminated all of the walking.”
[...]
Kiva robots don’t look anything like a human or try to perceive the world through humanlike senses. They don’t use sophisticated visual sensors to navigate; instead, they know where they are by using a simple and cheap grid system that’s stuck onto the floor of the warehouse.

That allows warehouse operators to switch off the lights and climate controls in the large areas of the warehouse that are patrolled solely by robots, cutting energy costs by as much as 50 percent over a standard warehouse.

Watch the little orange Kiva robots at work at Zappos’ new warehouse:

Innovation Killers: How Financial Tools Destroy Your Capacity to Do New Things

Sunday, February 1st, 2009

Clayton M. Christensen, et al. may overstate their case when they call discounted cash flow (DCF) and net present value (NPV) calculations innovation killers, and I would hardly say that such “financial tools destroy your capacity to do new things,” but they do point to a common misapplication of those tools:

While the mathematics of discounting is logically impeccable, analysts commonly commit two errors that create an anti-innovation bias. The first error is to assume that the base case of not investing in the innovation — the do-nothing scenario against which cash flows from the innovation are compared — is that the present health of the company will persist indefinitely into the future if the investment is not made. As shown in the exhibit “The DCF Trap,” the mathematics considers the investment in isolation and compares the present value of the innovation’s cash stream less project costs with the cash stream in the absence of the investment, which is assumed to be unchanging. In most situations, however, competitors’ sustaining and disruptive investments over time result in price and margin pressure, technology changes, market share losses, sales volume decreases, and a declining stock price. As Eileen Rudden at Boston Consulting Group pointed out, the most likely stream of cash for the company in the do-nothing scenario is not a continuation of the status quo. It is a nonlinear decline in performance.

It’s tempting but wrong to assess the value of a proposed investment by measuring whether it will make us better off than we are now. It’s wrong because, if things are deteriorating on their own, we might be worse off than we are now after we make the proposed investment but better off than we would have been without it. Philip Bobbitt calls this logic Parmenides’ Fallacy, after the ancient Greek logician who claimed to have proved that conditions in the real world must necessarily be unchanging. Analysts who attempt to distill the value of an innovation into one simple number that they can compare with other simple numbers are generally trapped by Parmenides’ Fallacy.

Communicating with code

Saturday, January 31st, 2009

It’s accepted within Web 2.0 circles that rapid prototyping followed by rapid iteration — experimentation — beats thorough planning. Paul Buchheit, formerly of Google, calls this communicating with code:

We did a lot of things wrong during the 2.5 years of pre-launch Gmail development, but one thing we did very right was to always have live code. The first version of Gmail was literally written in a day. It wasn’t very impressive — all I did was take the Google Groups (Usenet search) code (my previous project) and stuff my email into it — but it was live and people could use it (to search my mail…). From that day until launch, every new feature went live immediately, and most new ideas were implemented as soon as possible. This resulted in a lot of churn — we re-wrote the frontend about six times and the backend three times by launch — but it meant that we had direct experience with all of the features. A lot of features seemed like great ideas, until we tried them. Other things seemed like they would be big problems or very confusing, but once they were in we forgot all about the theoretical problems.

The great thing about this process was that I didn’t need to sell anyone on my ideas. I would just write the code, release the feature, and watch the response. Usually, everyone (including me) would end up hating whatever it was (especially my ideas), but we always learned something from the experience, and we were able to quickly move on to other ideas.

The most dramatic example of this process was the creation of content targeted ads (now known as “AdSense”, or maybe “AdSense for Content”). The idea of targeting our keyword based ads to arbitrary content on the web had been floating around the company for a long time — it was “obvious”. However, it was also “obviously bad”. Most people believed that it would require some kind of fancy artificial intelligence to understand the content well enough to target ads, and even if we had that, nobody would click on the ads. I thought they were probably right.

However, we needed a way for Gmail to make money, and Sanjeev Singh kept talking about using relevant ads, even though it was obviously a “bad idea”. I remained skeptical, but thought that it might be a fun experiment, so I connected to that ads database (I assure you, random engineers can no longer do this!), copied out all of the ads+keywords, and did a little bit of sorting and filtering with some unix shell commands. I then hacked up the “adult content” classifier that Matt Cutts and I had written for safe-search, linked that into the Gmail prototype, and then loaded the ads data into the classifier. My change to the classifier (which completely broke its original functionality, but this was a separate code branch) changed it from classifying pages as “adult”, to classifying them according to which ad was most relevant. The resulting ad was then displayed in a little box on our Gmail prototype ui. The code was rather ugly and hackish, but more importantly, it only took a few hours to write!

I then released the feature on our unsuspecting userbase of about 100 Googlers, and then went home and went to sleep. The response when I returned the next day was not what I would classify as “positive”. Someone may have used the word “blasphemous”. I liked the ads though — they were amusing and often relevant. An email from someone looking for their lost sunglasses got an ad for new sunglasses. The lunch menu had an ad for balsamic vinegar.

More importantly, I wasn’t the only one who found the ads surprisingly relevant. Suddenly, content targeted ads switched from being a lowest-priority project (unstaffed, will not do) to being a top priority project, an extremely talented team was formed to build the project, and within maybe six months a live beta was launched. Google’s content targeted ads are now a big business with billions of dollars in revenue (I think).

Of course none of the code from my prototype ever made it near the real product (thankfully), but that code did something that fancy arguments couldn’t do (at least not my fancy arguments), it showed that the idea and product had real potential.

How low can homes go? Try $0

Sunday, January 25th, 2009

How low can homes go? Try $0 — in Detroit:

Detroit real estate agent Ian Mason has sold homes for $1.

When I asked him to check the listings for other properties at that price, he found four more.

He then took me to a white, clapboard-sided house that his company, Bearing Group Real Estate Brokerage, has listed.

“If you want this house, you can have it,” he said. “I’ll just give it to you.”

“I’m not allowed to accept anything of value from a source,” I told him.

“Who said I was giving you anything of value?” he replied.

The median price of a home sold in Detroit last month was $7,500:

Mason counted 1,228 homes listed for under $10,000, 209 of which were under $1,000.

“Many of them are in pretty decent shape,” he said, “and some can be lived in.”
[...]
In the neighborhood where Mason offered me a $0 house (not including closing costs, escrow, taxes, etc.), almost every dwelling was in shambles. Boarded windows. Abandoned cars. Collapsed porches. Ubiquitous graffiti.

The home across the street was charred, likely by arsonists.

We drove through snow nobody would ever plow.

“What’s this place like in the summer?” I asked.

“You wouldn’t be driving through here,” Mason said. “There’s a small chance you’d field a bullet.”

Police stopped patrolling these neighborhoods years ago.

“So if I buy a $1 house, I’m going to need to hire some security?”

“Not necessarily,” Mason said. “Some of these neighborhoods are so desolate, crime isn’t much of a concern.”

“Really?”

“I could take you to 30 square blocks of urban prairie.”

The Motor City had more residents in the 1930s than it does today. About a million people have left since the 1950s, leaving less than a million today.

Enormous buildings sit vacant downtown, their hulking shadows darkening city streets at night. Unemployment is tallied in double digits. And this is how it is before Chrysler, General Motors, Ford and associated companies possibly file for bankruptcy this year.

Michael Lewis on the Death of Journalism

Saturday, January 24th, 2009

In a recent Atlantic interview, Michael Lewis answered a question about the dying magazine business:

Well my personal experience has been very nice. The market for me has only gotten better!
[...]
Well it makes it a little hard for me to prophesize doom. And I hate spinning theories to which I’m an exception. So my sense is, there’ll always be a hunger for long-form journalism, and that it’s just a question of how it’s packaged. And that people will always figure out how to make it sort of viable. It’s never going to be a hugely profitable business: it’s more like the movie business or the car business in that there are all sorts of good non-economic reasons to be involved in it. The economic returns will always probably be driven down by too many people wanting to be in it.

But I don’t feel gloomy about the magazine business at all.
[...]
It’s always inherently in a state of turmoil of one form or another. But let me put it this way: when I write a long magazine piece that gets attention I feel like it’s more widely read now than it was ten years ago, by a long way. In fact, it feels excessively well read. Twenty years ago I might get a couple of notes in the mail and I’d hear about it maybe at a dinner party. And that would be the end of it, and it would go away very quickly. Ten years ago it would get passed around by email, and it would seem to have a life to me that would go on a little longer. Now the blogosphere picks it up and it becomes almost like a book: it lives for months. I’m getting responses to it for months. And I don’t think the journalism has gotten any better. It’s just the environment you publish it in is more able to rapidly get it to the people who are or might be interested in it. They’re more likely to see it. So the demand side of things is not a problem. People really want to read this stuff. The question is how you monetize that.

And there are still magazines that make plenty of money. Vanity Fair makes plenty of money. Huge sums of money. The New York Times Magazine makes plenty of money, it’s just buried inside this institution that doesn’t.