Say Goodbye tothe Suburbs.

Have you noticed that we are in the middle of another almighty shift in human movement? We all learned in school about the Industrial Revolution, and how it forced the end of the Agrarian way of life for Millions in the West. You got the vision of millions of people being herded in never ending bedraggled columns toward the ‘dark, satanic mills’ of the soot-covered cities. The City where I was born was like that. Prior to the 1850’s, it was a few canal locks on top of a hill whose only claim to fame was that the valleys to its west used to be a country hunting estate for Henry VIII.

Of course, once factories started to require freight, canals became the preferred method of transportation, and this small town became a city in a matter of months, apparently.Growing up, I knew I lived in an automobile manufacturing city close to Europe’s largest Freeway exchange, with a large ‘green belt’ around it, just a few miles outside the suburbs where my family moved to – an actual 20 minute bus ride from downtown, how exotic!

These days I live in a city that has shrugged off it’s Lumber past for the most part, and has become part of what the more modern thinkers amongst us describe as a global cyber-network, more attached to a city down the coast in a different country than it is to it’s own nation’s capital. Among the most exciting real estate developments in recent years has been the transformation of a run down warehouse district (A relic of the port city we always were, but that has now moved to a more easily managed part of town), into a hip, young, cyber-entrepreneur type of clichéd downtown ghetto: Restaurants and bars that are way too expensive for what they sell, a Starbucks every ninety feet – that kind of thing.

This major shift in the migration habits of the current generation is due to the Internet. Now, kids are learning how to navigate spaces much bigger than the direct world they will graduate into. They are then using this knowledge to run their own businesses from a laptop and a cell phone, so they don’t need space to make money. With post-boom generations becoming smaller, there is no pressure to marry and have their own children, so the entire edifice of satellite cities, bedroom communities and the daily commute will be over in the next decade. Our current view of 2-up, 2-down semis in the suburbs will be the same as we now look at 4 story, 5 bedroom, and 4 bath Victorian mansions. OK for some, but way over the needs of most of us. As oil prices go up, and the automobile becomes too expensive to run, what will happen to the suburbs?

Of course, if they become too expensive to run by their city councils, eventually they will be swallowed up by their nearest cities – the very ones that birthed them in the 70’s. Whole neighbourhoods will be bulldozed to cut down on costs, and to save them from criminal activity. Eventually, they will be returned to farmland to promote local produce manufacture in the new, warmer climate.

In other words, the entire suburb culture in the 2040’s, could well look very much like it did in the 1950’s: A One-Century experiment in growth for one generation that was shown to work, but with many flaws that greed alone couldn’t answer.

The Tech Giant Mating Game

In the brave new Internet world, where the consumer is king, what does it mean when news of a takeover of Yahoo my Microsoft refuses to go away? Does it mean less choice, or better service? In 2008, this news appeared to be revolutionary, but here we are two years later, and it hasn’t moved forward. It has also given Google’s share price time to recover, while Icahn and the rest of the Yahoo board are still hurling insults in their own sandbox, and perhaps time for everyone to get over the whole thing. Could it still happen? What would we get as well as the partners, and their competition?

It still make sense from Microsoft’s part, especially, hanging in there, seeing the value of the buy, and perhaps the row that would come from the announcement of intent to buy. I am still surprised that Yahoo is that weak, but perhaps that was a window that has now closed.

They both have several search-related patents – combining them may well allow them to finally narrow the “Google gap” (the huge difference in percentage of the search share market). Microsoft can offer money, technology and excellent management processes (something Yahoo sorely lacks), while Yahoo has experience, reach, passion and credibility on their side. Together they could become the world’s premier search engine.

Conversely, if these two gargantuan forces work day and night to thwart one another, as opposed to trying to evolve into what searchers demand they become, it could possibly open the door for up & coming search engines, Ask.com for example, to gain mindshare, not by competing with their larger rivals, but by focusing on their own evolution based on the increasing demands of users.

Yahoo still has a lot of potential, especially if it can effectively leverage its rather in-depth knowledge of social media. Most of the companies Yahoo has acquired in these interminable two years or so have had a social media focus and with the way the use of the internet is moving, the social side of the industry is just busting at the seams to have a “leader” here. Yahoo could be that leader. Microsoft on the other hand, buys companies and really doesn’t know how to leverage them properly. They are, basically, horrible at search. Microsoft has been trying for several years now and has made virtually no significant progress on market share. That being said, Microsoft has been bolder about integration of universal search-type aspects, and that approach would serve both vehicles well.

The main prize still remains, though: Mobile Marketing. Whoever can maximize ROI on this area will be global king (Outside of China, as Google is finding out.), so it may take a third partner to facilitate the move. Imagine the partnership between say a Verizon or Sprint with a ‘MicroYahoo’? This could be the positioning that everyone is waiting for: Making money on a platform that we understand as a non-paid advertising platform. Not just companies involved, but us poor consumers – this could reshape everything for the next few years.

The way back is a global one?

I have read two different articles this week concerning two regions known as war zones, now on the way back to what we would know as normality. Eerily similar, but known for two different types of conflagration, it is amazing to see how their turnarounds have taken place, and they both offer ideas for the future.

 

I almost dropped the newspaper when I saw a travel article on Rwanda. Not because of it’s remote location (Just to the right of Congo), but the initial mental picture one gets when you hear of that country – Genocide by machete. It has been 16 years since it happened, but can you really think of anything else? And now, it’s a destination. Let’s forget about jokes like: How do they cut the garnish for my Sun Downer, the very thought that they have cleaned up their act enough to invite outsiders into their country with the wide smiles of the tourist industry is almost beyond belief. It feels like I’m the realtor for the Amityville House: “This really is a hidden gem…and the atmosphere around here.”

 

In the business press, you can read about Belfast and it’s promising future within the European marketplace. Unlike one orgiastic murder spree in Rwanda, wasn’t this place the home of guerrilla warfare for almost a Century? Of  Red Brigade Redux? What kind of entrepreneurial leap of faith leads someone to say: “Ulster! Why didn’t I think of that place earlier for international expansion?”

 

Bad jokes aside, the reason for change in both of these places is the same: Globalisation.

In both arenas, the final goal, either eradication of a tribe on a massive scale, or the joining of a province to another country became moot when the communication explosion of the last 10 years shrank the entire globe, and brought everyone closer together. In both places, the thought that the World ended at their own borders was proved to be untrue. When the European community came knocking with bulging bank accounts, willing to give you investors from Switzerland and Luxembourg that would make a definitive difference in your everyday life, continuing to kill became a secondary importance. When the US realised that they could send you tourists that would drop more dollars than you have ever seen in your life on a daily basis, the machetes stopped, and forgiveness began. Even the mighty UK saw that the importance of protecting a few of it’s own people in the name of a commonwealth that was no longer the largest voluntary trade club in the World, had become a lot less important.

 

Perhaps the toughest part of the entire process appeared to be sitting down with your enemies, and negotiate a settlement. However, if the entire reason for your existence, or your past actions has been taken away from you, what is there to negotiate. You may as well close the doors and get the Monopoly out – which is what may have happened as far as we know.

 

While I am loathe to admit it, the prospect of giving yourself a better life through trade, and not social welfare, will make entire terrorist organisations change their minds. It’s a Conservative, free trade argument, but it has been proven, and if it saves lives, who can argue with it? It remains to be seen that when globalisation ends due to high fuel prices over the next few years, if the porous international borders that makes Free Trade work in a globalised marketplace, begin to harden like last night’s custard. When they do, look out for these groups to start buying arms once again.

Is the end really near?

In a marketing position, you are always looking for new ways to deliver ‘the message’. Any way that you can insert a description of your good or service into a stranger’s subconscious is a plus. Over the last few years, online commerce has (supposedly) taken off to the extent that everyone is doing it. I have yet to define ‘everyone’, because to me this number appears to be about 7 customers and 100,000 companies trying to sell, but perhaps I’m wrong. My question is a simple one: Why are they doing it? Is it because they simply cannot be bothered to go outside, meet someone else, check for comparison prices, or talk to someone that works in retail? Is it because eventual control over the purchasing process, and the possibility of a good financial deal is the be all and end all of every buying decision? I think that we are being sold faulty goods, here: Let’s drill down a little. I shall be 50 years old this year, and I spend a lot of time online. There are many reasons for this, but in the mid-nineties when I was introduced to online worlds, I found it interesting in an anonymous kind of way. You could say and do anything online (or watch it.), and no one really knew you were doing it. It’s a childish emotion, I know, but it was fun for a while. My attention span has never been truly measurable without a micrometer, but that’s just me. Being adolescent-minded, it was obvious to me at the time that the pioneers of the Internet were ones that would interest kids that would grow up with your website, so their thought processes were aimed a certain way, anyway. But what happens when Internet users don’t grow up? Because that’s where we are at. There has been a lot of fear over the death of newspapers, lately. Does anyone read anymore? Not the internet generation, that’s for sure. The answer isn’t a lack of knowledge about this generation, it’s a case of newspapers not talking down to their readers (Obvious exceptions accepted.). It’s the case that to read the entire newspaper, you have to have an interest in politics, international diplomacy, business, spots, pop culture, fashion and the workplace. That’s a little dry, when you have the choice of reading about Johnny Depp’s love life. If you don’t have an interest in what someone else is thinking, you aren’t going to educate yourself. If you are more at home just doing what you want, and reading about what is interesting to you, you aren’t going to find much interesting enough to hold your attention. For the last 70 years, we have been beholding the end of some medium or other: Newspapers were going to be killed by the movies; movies by radio, radio by TV, TV by cable; cable by the net, and we are all still enjoying all of it. Why? Because everyone learned to adapt, and offer something different. What we aren’t going to change is the infantilization of the current generations mid-thirties and below. While they are still stuck on celebrity website gossip, the remaining 10% in power are reading newspapers and are making decisions that affect all of us. They are manipulating exchange rates, organising the fall of governments, and the price of oil. The only thing anyone can do is to try to educate themselves about what is happening. How the real estate crisis in the States has resulted in a generation in their late fifties having to work for five more years. How the continuing rise in oil prices are due to the peak of easily accessible supply that means that it will run out about 3 years after the US social safety net runs out of money. At this time, the 4-500 miles either side of the equator will be uninhabitable thanks to global warming, and about a billion people will be shoehorning themselves into the rest if the World. When I was growing up, we paid a license fee in order to be able to watch TV. That fee ran the national broadcaster that allowed it to broadcast all that boring stuff that you should be watching. I DID gain an interest in business and cricket, I didn’t in Opera and ballet, but it was there if someone wanted it. What is wrong with defining a piece of the 500-channel TV universe and multiple radio offerings?  If we are to have any hope in our race, it is those in their twenties right now that will have to right these wrongs within the next 20 years. What a pity that the majority of these are tweeting about their underwear, rather than learning how to fix the place.

When the Children are all grown up…

I was surprised to see that many 20-year old’s are looking for a special kind of property in the North American urban market: One that has a ‘granny flat’ so that they can have their parent or parents move in with them when they no longer need to pay the mortgage on the Family home. This is a wonderful idea when you consider the reasons why this has come about:

Families are having children later in order to enjoy a firmer start to their careers, which means they aren’t ending with their mortgages until their late sixties. This delay in their career line has been passed down to today’s teenagers, who expect a ‘gap year’ when they leave High School! This used to be the preserve of either the rich after a handful of years in Further education, AND getting their degrees, or gangs of perma-drunk females from Australia in VW microbuses – well it was if you were brought up in Europe.

Just like everything else in today’s life, the culture of entitlement we have in the ‘developed world’ now means that everyone must have it, so most kids aren’t even looking at a career until their mid-twenties. Following the ‘gap year’, there’s now the ‘sleeping-in-till-noon-while-living-at-home year’.

So we extend our adolescense, and work until our early 70′s, pay the mortgage off, and go get our revenge on our kids by living with them, and blasting Adam Ant on the Stereo to say to the kids: “There! How do you like it?”

While on the same subject, there is a distateful commercial on TV from Exxon, that mentions the rise of the Middle Class in the BRIC countries (Brazil, India, and China), in a very haughty way, mentioning that they need ‘greater access to fuels’, like those same parents, trying to get their 22-year old’s to work.

What we in the Western world, the ‘parents’, have done is raised the expectations of people that have taken two generations to go from the Colonized, through the Poverty struck, too something resembling life as we know it. We have used them as cheap labour, and a home to factories and plants too poisonous for our neighbourhoods for almost half-a-century, and are now blaming them for the mess that they have left, and the strain on the environment.

At some point in their life, every parent realises that their kids have grown up (and gotten their butts out of the TV chair?), and then we expect them to look after us. Isn’t it time that we did this with these developing countries? They are the next generation of this planet’s First World, as we fade into the background.  It’s time to start a dialogue about them looking after us in our dotage.

If they need more R and D assistance, more education, more fuel, more leeway, less Culture of ours being forced on them (Adam Ant, again), and more of us beginning to understand theirs.

We are going to need someone to look after us in the next 20 years – let’s see if we can use our lives as the Granny Flat under their ever expanding house.

What is your house really worth?

What will your house be worth in 15 years?

Many of us are assuming that the equity we have in our homes will be used in part for retirement or upgrading to larger properties. In the current financial climate, it is worth checking exactly how much that actually is.

In August 2007, the ‘sub-prime’ mortgage market imploded, leading to almost 10% of all North American residential properties either in foreclosure, or quickly getting there. What in the name of Martha Stewart happened?

It’s an example of how the investment industry has invented new and often inferior ways of selling exactly the same thing – stocks and bonds. Our Boom generation has so much money in invested in  other people’s invisible worth (including debt), that we often make decisions on how to make some money without looking at all of dangers that lurk inside transactions that trade computerized hands globally at the speed of light every minute of every day.

Asset Backed Commercial Paper (ABCP’s) are a symbol of the ever-increasingly complicated Investment industry. These are short-term notes backed by securitized loans (ranging from everyday auto loans to immigrant loans) and many more long term debt, like unleveraged CDO’s, and more letter collections that we haven’t heard of. It results in a ‘layer cake’ of debt, each strata being a different form of debt, that is sliced into manageable packages, and passed onto financial institutions to hold for short amount of time. Like any kind of rental, banks and savings and loans, earn profit on the debt for holding it before passing on their ‘slice’ around the tea table to someone else.

Now, what happens when someone receiving a slice of cake says:” These are a little too much for me, I’ll pass.” Too much in this case being too much risk to hold at once. For that split second, some institution (And many think it was Saudi or Chinese in origin), decided that they had enough debt on their plates for that split second, and the entire line stopped. Plates can’t go forward or back, and everyone looks at their debt more closely. Here, they see that there is so much residential mortgage debt attributed to everyday folks, whose only standard for receiving a mortgage was that their heart was beating in their banker’s office at the time.

When the line stops, the debt comes back to it’s originator - large scale investment banks, and we all know what happened to one of these. Bear Stearns has gone, under a mountain of returned debt, and the US government had to step in to sell it at a fire-sale price.

Because house owners do not have a close relationship with the mortgager, they simply walk when they can’t afford to pay a mortgage. House prices plummet (and it has happened in the last year or so) and, as a result – yours is probably worth no more than last year, and possibly less.

In a future post, we can examine what effect this has on towns and cities, so if you have a comment, or more facts, let’s have them and we can include them.

This is not getting any better, it’s getting worse. Some pundits realise that this could be the tipping point that sends North America into a 10 – 15 year recession. That’s the next 15 years before your property is worth what it’s worth now.

So check your property price, and imagine living on that after 15 years of more everyday price rises; or look back to 1993, and see what your house was worth then, and how far would that get you today?

The World is changing, and you need a New Future in order to get over this, and other new realities. Let’s get ready for change.

Look at the date!

The Baby Boom is over! This HUGE demographic is beginning to retire, and this means that your life tommorrow will be diferent than it is today. Are you ready for the New Future?

Perhaps it’s time to go out on your own: Affiliate marketing,or some other business. Not just to earn earn money, in a home-based business, but to find out more of this new wave, SEO-driven, Internet marketing, social marketplace world. Cyberspace has replaced the ‘real’ world in terms of communication and business marketing.