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In September 2007, I wrote: “[For financial services firms], the income statement is the past; the balance sheet is the future.” Had I thought more about it, I would've said that was now true for every company.Since I wrote that note, we've seen companies of all kinds writing off assets left and right. In many cases, these corporations try to position asset write-offs as “non-cash." And while technically correct, I would again remind readers that th
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e reason the charges are “non-cash” is that the money (or stock) went out the door long ago. And to suggest that these write-downs aren't important is like suggesting that bank-loan losses (also non-cash charges) don’t matter. Asset write-downs do matter - whether they're banks' loan assets, manufacturers' inventory, media companies' goodwill, or government agencies' deferred tax assets. At their core, outside of cash, balance-sheet assets are a forward-looking promise of cash “value” to be received at some time in the future. So when assets are written down, a corporation or bank is sending a clear message that the future -- particularly future cash flow -- isn't as bright as it once was.Recently, this thought has had me rethinking the reason the “future” on corporate balance sheets was so rosy - how it was that balance sheets could balloon with more and more forward-looking assets? Obviously a lot of the balance-sheet growth reflected a willingness on the part of manufacturers of all kinds to accept installment notes in lieu of cash - but there's also been a staggering amount of growth in goodwill, intangibles and a whole host of “other assets." Why?While I won’t bore you with the twists and turns of my thinking, where I ended up was simply, at all places, inflation. That, thanks to the basic, historic, economic notion that prices only go up over time, asset values have a floor. And therefore, because of our “inflation bias,” we should be willing to recognize more and more of these “promises” on corporation and bank-balance sheets.But if our inflation bias is truly what has supported the floor for all of our forward-looking assets -- again, everything on the left side of the balance sheet, less cash --  then what happens when deflation hits? As we've seen with Bear Stearns, Time Warner (TWX), General Motors (GM), Fannie Mae (FNM) and Freddie Mac (FRE), already deflation is like a trap door to floor on asset values: The hoped-for promise of cash in the future is suddenly worth substantially less than the reality of cash today.I don’t know where our current deflationary cycle ultimately takes us, but I hope that this helps to better explain how balance sheets reporting hundreds of billions of dollars in assets one day, can show 0 the next. And, more importantly, why -- during periods of deflation -- all balance-sheet assets (other than cash) are of questionable value.Ultimately, I wonder whether, like the rating agencies, our accounting firms will become yet another scapegoat for our current crisis: That they too, should've recognized the “inflation bias” inherent in balance sheets and some how prevented it from happening; that maybe “cash accounting” should've been used, particularly in a world filled with derivatives and off-balance-sheet vehicles.But to end where I began: “Earnings are the past; the balance sheet is the future.” And with deflation, that future isn't very bright.Top Stocks blogging partner Todd Harrison is founder
& CEO of Minyanville.com. This post was written by Minyanville Contributor Minyan Peter.
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Many things about mico houses appeal to us: Easy cleaning, teeny tiny utility bills, reduced clutter, plus affordability and portability. With many of these designs, if you have to move, you can take your house with you.
After reading about tiny houses, our 1,000-square-foot two-bedroom house seems huge. We don't really need to use, heat an
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d clean all this space. And many of these tiny houses are so cozy and cute.
We suspect that Tumbleweed Tiny House Co. homes most often come to mind when people think about micro houses. But we've found plenty of other options, including little houses that float.
Here are some excellent Web sites (thanks to Heather at The Greenest Dollar) to read about what life is really like for those who've embraced the small-house movement:

  • Steph writes about tiny floating houses at Coming Unmoored.

  • Steph directed her readers to The Hermitage, the blog of a British couple that travels about in a quaint wooden house on wheels. This is not a recreational vehicle.

  • Tiny House Design is about, well, tiny-house design.

  • Little Diggs explains how to furnish and maximize the use of less than 500 square feet of space.

  • Hillary at This Tiny House is turning a travel trailer into a permanent home.

  • The online home of the small-house movement is the Small House Society.

Heather lists other blogs in a post at The Greenest Dollar and answers common questions in another called "Why live in a micro house?" (As a household of one, all we can say is: Why not?)
Related reading:
Some thoughts on the small-house movement
House price hell
Extreme frugal living: Move into an RV
The end of the Shopaholic Nation?
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This post comes from partner blog Blueprint for Financial Prosperity.
Do you have an accomplishment journal?
I don't know if you've seen my Wall of Fame & Fortune & Awesomeness, but it's a list of all the awesome pub
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lications and Web sites I've had the pleasure of being in, on or near. It's essentially a list of my accomplishments as a result of this blog and it's something I feel very fortunate to have been able to do. I was in the local paper once when I was in sixth grade for reading to kindergarteners in my school. The New York Times was a little bigger than that.
The point of displaying that link here and at the top of every page of my blog isn't to brag or show the world how awesome I am. It's there because it gives me the motivation to keep doing what I'm doing every day, day in and day out. Life can be a grind, whether you work at an office, a restaurant, a factory floor, a job site or a retail store. Unless you make a record of the highlights, you can often get lost in the grind and find yourself on the flip side without a clue of what happened.
There are a few other reasons why I think an accomplishment journal is crucial.
What is an accomplishment journal? An accomplishment journal is simply a place you can write down and celebrate all your accomplishments. You define what success is and you define what you consider an accomplishment. The door is wide open and anything you want to put down is fair game. What an office manager considers a success is different from what a stay-at-home mom or dad considers a success. A student has different goals, and thus different accomplishments to note, than an executive. However, for any one of those people, an accomplishment journal is something that can provide value for years to come.
Why keep one? If you ever kept a journal as a child (I didn't, but my wife did and I love reading her cute notes), you know how much fun reading your own thoughts can be. Who and what bothered you, who you liked and disliked, what your concerns were at the time, etc. An accomplishment journal is similar in that you can relive your successes. It makes it much easier to remember the past and offers a glimpse into your own development. That's the emotional, sappy reason. There are also many logical reasons to keep a journal.

  • It helps you keep your resume up-to-date. I recommend revisiting and updating your resume every three months, even if you aren't looking for a job. It's important to update your resume when the accomplishments and responsibilities are still fresh in your mind. Can you accurately remember the work you did five years ago? If you were put under the gun -- for instance, laid off -- would you be able to remember the work you did last year with sufficient clarity? If you can recall exactly what you did, maybe you don't need to update it every three months. I only know that I can't, which is why I update it every three months.

  • It motivates you. One of the biggest things I learned from my wife when she was looking for a job several years ago was the importance of progress when there appeared to be none. One of the tips I offered in my post about three morale-boosting tips for job seekers was to track your progress. Tracking your progress in a job hunt is like tracking your accomplishments. It may seem silly or minor to you, but when you send out 10 resumes or go out on an interview, that's an accomplishment. When you look back after a week of searching, it's much better to see "I sent out 85 resumes" than to remember "I spent all week sending resumes."

  • It lets you define how success is measured. Mark at Soul Shelter recently wrote about his struggles with the idea of success. Mark is a midlist writer (where the books aren't bestsellers but sell enough to justify publication) and struggles to describe his vocation when asked at holiday parties. While his struggle was with the external barometers of success for his field -- bestseller lists and book sales -- he does talk about how "we ought to try to recognize and value others' achievements, big and small, vocational and personal. And most importantly, if we want to be happy and self-confident and continue wholeheartedly doing the work we love -- however underpaid or undervalued -- we must learn to rely on the measures of success that mean the most to us personally, and strive not to lose sight of them."

Having your own journal of accomplishments can help further that goal, if only for yourself. Rather than look to income or other external measures, your accomplishments are whatever you want them to be and, when you write them down, they can give you the motivation to work harder.
You decide what you want to write down and only you will be reading it, so feel free to write down things that are important to you and may not be important to anyone else.
Do you keep a journal of your achievements and accomplishments? If so, what was your latest accomplishment? It's OK to share.
Related reading at Blueprint for Financial Prosperity:
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Is pet insurance necessary?
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Consumers are pulling back, and lenders are reducing their exposure to merchants. Among those being squeezed are Circuit City, Loehmann's and Claire's stores.
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More job losses are anticipated for this year, and that spells trouble for apartment stocks already hurting in the recession. Investors are weighing the possibility that demand and rents will fall further in 2009. The rental market is closely tied to job growth, and analysts that had expected slightly positive rental picture this year are now forecasting declines.Many apartment companies are hunkered down, placing new development projects on hold and cutting staff to save money. They're trying to ride it out until the job market improves, but that looks to be several quarters away. Here are so
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me stocks to watch in this downturn: Apartment Investment and Management (AIV): This company just declared a special dividend of $2.08 per share, or $221 million total. But analysts question whether that dividend is sustainable in the future. Part of that dividend came from taxable gains from selling properties this year. AIV shares stayed above $35 for much of the past year, but took a sharp dive in October and never recovered. The stock was down to $10.40 on Tuesday. AvalonBay Communities (AVB): This stock has a well-regarded portfolio, with higher-quality properties in markets with less exposure to the single-family housing overhang, said analysts at Barclay's. AvalonBay also has a strong balance sheet. Still, the company isn't taking any chances this year. It canceled plans to develop eight parcels and will cut an unspecified number of jobs, though the 15 apartment communities under construction are still going forward.Camden Property Trust (CPT): Shares of this company, which develops and manages upscale apartment buildings, are down 35% from a year ago. The stock has been getting some key analyst upgrades recently, which should make investors feel better. Merrill Lynch upgraded to neutral, and Citi upgraded to hold. Camden's holdings in Texas and Washington D.C. should help offset declining markets in Southern California and Florida, Citi said.Equity Residential (EQR): This company is also freezing development plans, axing five projects it had previously planned (it still has 10 properties currently under construction). But Equity was able to get a $543 million loan through Fannie Mae (FNM) in December, which will help tackle other debt that's maturing as well as fund development. Essex Property (ESS): Essex has one of the better balance sheets in the business, according to RealMoney.com. And it's holding up in the downturn because of one word: location. The company focuses on cities in the West Coast with limited housing and lots of technology jobs. In Silicon Valley and San Francisco, executives said, the foreclosure rate is half the national average.
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This post comes from Martin H. Bosworth at partner blog ConsumerAffairs.com.
Veronica Kennedy spends her days as an information technology consultant in Virginia, but she also has a passion for making clothes and products out of fiber. "I knit, crochet and sew," she told ConsumerAffairs.com. "I have been starting to get items together to set up an (online) shop.
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Additionally, I do a lot of commissioned work for baby clothes and personal gifts and whatnot."
Thus she was shocked to hear that she might not be able to continue her side business after Feb. 10. According to reports from other toymakers and craftspeople, the Consumer Product Safety Improvement Act -- scheduled to take effect that day -- would force people like her to pay thousands of dollars to test every children's product they make for lead content.
"I am really concerned for the testing issue (can't afford it) and, if it turns out to be just really broad-stroke legislation, the amount of loopholes that someone could take advantage of and sue me over," she said. "What are my rights? What/where are my protections as a micro-manufacturer? What in the world were they smoking when they threw this together?"
A groundswell of opposition has risen in recent months, with supporters of handmade crafts and secondhand stores banding together to protest what they consider excessively burdensome regulations. Handmade crafts seller site Etsy posted an open letter on its blog urging vendors to contact Congress asking for assistance and clarification on the issue.
"Our members would like to better understand how the CPSIA took into account these smaller businesses operating with fewer resources for testing and compliance," Etsy said. "We believe Etsy artisans are pro-testing and pro-safety; the problem is the prohibitive certification costs relative to their small businesses' incomes."
Kathleen Fasanella, who runs the Fashion-Incubator site devoted to improving factory manufacturing practices, set up a site called National Bankruptcy Day -- Feb. 10, the day she believes many businesses will collapse from having to pay for the testing costs required by the CPSIA. "It is my opinion -- not fact -- that the law is unsustainable, whether it's because it can't be enforced with smaller vendors or the number of bankruptcies. Either way, my opinion is that they will change the law," she wrote.
The CPSIA was signed into law in August as a response to the ongoing crisis of imported toys -- containing lead, phthalates and other dangerous chemicals -- being sold in big-box retail stores. Despite continual attempts by multiple industries to weaken the bill, it passed both houses of Congress by huge margins.
Sen. Mark Pryor, D-Ark., was the primary sponsor of the bill in the Senate. According to his press secretary, Lisa Ackerman, the bill is "not designed to close down thrift or consignment stores, or independent craftspeople."
"Retailers had a seat at the table throughout this process," she said. "The focus was on making sure major manufacturers were in compliance with the new laws -- we didn't want any more cribs and toys falling apart."
Pryor's legislative director, Andy York, agreed. "The enforcement priority was on big-box retailers, not small manufacturers and thrift shops," he said. "Independent product makers certainly shouldn't not comply with the law, but the (Consumer Product Safety Commission) isn't going to be banging down the door of thrift shops on Feb. 11."
The most common criticism of the law is that it may be written too broadly. According to Ackerman and York, that was intentional. "Congress passes the law in broad strokes, but we leave it up to the enforcing agency to handle specifics," York said.
"The law was written to give the CPSC interpretation on how to enforce it," Ackerman said.
Answers unclear
The CPSC has been underfunded and understaffed for much of its existence, most recently hobbled by a lack of a quorum and a revolving door of acting chairmen. That lack of ability to enforce consumer safety standards contributed to the proliferation of unsafe products on shelves.
Multiple consumer organizations have petitioned the CPSC (.pdf file) to offer more clarification on how the law will be implemented and enforced. "The vacuum of implementation information, as well as the proliferation of misinformation regarding actual testing requirements and the cost of testing is leading to confusion and fear," they said.
"CPSC must take the initiative to allay their fears by providing prompt, common-sense, and explicit interpretations regarding exemptions to CPSIA stipulations, guidance as to the realistic cost of testing, and education regarding compliance with the CPSIA for retailers, including thrift and consignment stores," they said.
The CPSC put out a press release on Jan. 8 stating that resellers were not required to test products for unsafe lead content -- but that "resellers cannot sell children's products that exceed the lead limit and therefore should avoid products that are likely to have lead content, unless they have testing or other information to indicate the products being sold have less than the new limit. Those resellers that do sell products in violation of the new limits could face civil and/or criminal penalties."
The agency also put out a request for public comment (.pdf file) on Section 102 of the CPSIA, which requires third-party testing for products, to determine its effect on businesses and individual proprietorships. The comment period closes Jan. 30.
Representatives of the CPSC were unavailable to comment on how the law would affect individual product makers.
Clarification needed
For now, it seems that the protests have had some effect, and the CPSC is working to modify the most controversial sections, ensuring that handmade-product makers and sellers alike will not have to shut their doors come Feb. 11.
But for many people living on the margins, who can afford to buy only secondhand or thrift clothes, the possibility of losing that avenue remains worrisome. Shelli Zink, a bookkeeper from Triangle, Va., said  she "never pays full price for anything, ever," and worries about the long-term environmental and economic effects of small vendors going out of business.
"(I) don't want to see products with lead or phthalates in the market, hurting kids, but what about hurting them by stifling the market, increasing costs, and more damage to the environment from an increase of waste to landfills and increased manufacturing needs?" she said. "There needs to be clarification. Are used items at risk? Craftsters? Small manufacturers? Is this an all or nothing or do we accept that the better option is small risk with small businesses?"
Related reaading:
Feds: Thrift stores don't have to test kids' products
New lead laws worry toy companies
Recall alerts delivered right to your mailbox
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In the housing market collapse, a new breed of rip-off artist has emerged, promising a better deal to those who fear losing their homes. Here's what to watch out for.
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Up until now, the biggest obstacle to the sale of hybrid cars is that some Americans think the people who drive them are sissies. That may be true, but Toyota has sold more than one million of its Prius models worldwide. Honda is not far behind with its less expensive models. The Big Three could not fit all their electric and ethanol-powered cars onto the
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113" mce_href="http://www.reuters.com/article/businessNews/idUSTRE50A2VM20090113">showroom floor at the Detroit Car Show.
Toyota now admits that the sales of its Prius are dying in the US. That is because of two things. One is that no cars are selling at all. The other is that hybrids are expensive. The price of all the extra technology gets passed on to the consumers.
US auto firms are getting into the "green" car business at just the wrong time, which is consistent with the rest of their behavior over the last four decades. Oil prices are moving back toward $30 and many economists believe this that will be the new normal. China and India have cut imported oil as their economies slow. Americans would rather ride bikes that drive cars.
When Americans do look at a new car, their vision is likely to be short-sighted. Gasoline is back under $1.70 and if oil moves down further prices will fall more. If a hybrid runs $5,000 more than a traditional gas car, who is going to pay that difference to save the environment. No one, particularly when the cost of filling up is down by more than half what is was last summer. Who cares what happens in 2015?
The green car revolution was based on the premise that the average man could help the Amazon rain forests and save money on driving at the same time.
Send a memo to the monkeys. The trees are going away.
Top Stocks blogger Douglas A. McIntyre is an editor at 24/7 Wall St.
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Here are today's hot deals from dealnews.com:
Adult ski gloves for $5.99. With free shipping via coupon code T6WELCOME, that's $18 below list and the lowest total price we could find.
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5-Barebones-PC-for-Intel-CPUs-with-My-Kover-Skin-for-100-8-s-h/273579.html?ref=smartspending-20090113" target=_blank mce_href="http://dealnews.com/Shuttle-KPC-K45-Barebones-PC-for-Intel-CPUs-with-My-Kover-Skin-for-100-8-s-h/273579.html?ref=smartspending-20090113">Shuttle KPC K45 Socket 775 bare-bones PC for Intel Core 2 Duo for $99.99 with about $8 for shipping. Better yet, get a MyKover holiday skin for free. Together, that's $24 over our mention of the bare-bones PC alone from November, but $6 under the lowest total price we could find for the two items separately.
Computer rearview mirror for $9.98. Coupon code bp18250poff cuts it to $4.99. With free shipping, we couldn't find a similar item for less elsewhere.
Sennheiser CXL400 lanyard headphones for $19.99 with free shipping. It ties last week's mention as the lowest total price we could find by $5.
Gap men's jeans from $19.99. We haven't seen Gap jeans this cheap since last July. Shipping is a flat-rate $7, or add any Piperlime item and use code SHIPPL to qualify for free shipping.
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Markets tumble in Asia and Europe as companies show poor results in the recession. Obama seeks to use the remaining TARP funds.  Bernanke calls for additional stimulus measures for economy.
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