Joe Wheeler

Working on a presentation, probably will post slides somewhere

Wed, 24 Sep 2008 12:09:04 -0400

Working on a presentation, probably will post slides somewhere

Addicts, Pushers, and The Fed

Tue, 23 Sep 2008 19:42:04 -0400

Crazy title I know; what do addicts, pushers, and the federal government have to do with each other?

They make perfect crack baby mortgages!

Combined they all make a great analogy for the past 3 years mortgage lending practices and the unfortunate greedy decisions made by so many citizens in the US. The general public has no clue how the mortgage industry works, but they definitley know and understand what an addict, a pusher, and the federal government are. That’s why I’m going to use them here.

This is the first time that I’ve talked about what I “do” most of the day. Maybe it’s the current financial times coupled with the political drama that completely consumes my Wall Street Journal every morning? I’m not sure what it is, but regardless it’s motivated me to come with a brutal analogy of the mortgage mess. Someone has to, why not me.

I come from technology and web; educated as an electrical engineer and 5 years ago I started with a company that builds software to manage default mortgage cases for the nations largest mortgage companies. You know, the guys that are in the Wall Street Journal everyday. Anyway, our applications help them manage all of the foreclosure and bankruptcy cases (defaults) between themselves and their attorney networks throughout the country. It’s busy.

So over the past 5 years I have learned the default mortgage business…. basically, the “what happens” when I stop paying my mortgage. There are so many mis-conceptions, but that’s entirely different post; actually, a different blog…

So, back to the intent of the post; explaining to you in a simple analogy what is happened with the mortgage and housing mess.

The question is:

What do addicts, pushers, and the Feds have to do with each other?

Simple - these are the three components needed to produce “crack baby” mortgages

Ok, ok, ok - I know it’s controversial to use such an analogy, it’s unfortunate, but true…stick with me here, you might learn something.

Let’s define each component so you get a better picture:

The Addict -

This is the general consumer that is addicted to always having bigger and better; but doesn’t have the means to get “it”. In this case, they want to have a house that is 10X their annual income; and regardless of the terms, if they can get the money, they will buy it.

Just like the crack-head parent, if they can get their hands on it, they will do it, regardless of the consequences. Like job loss, tooth loss, family loss, life loss, etc….doesn’t matter, they will do it

The Pusher -

Boiled down, these are the mortgage companies and investors (Fannie Mae, Freddie Mac, and many more endless companies backing mortgage paper). I label all of them as pushers becuase for years they have been supplying the crack….errrr….I mean loans.

Think of the investors as the coca fields in South America and the mortgage companies as the distribution network on every corner of every US city. Supply of really bad mortgages with extremely loose terms have been at an all time high for the past 3 or 4 years. The business arrangement is like this….the investors “have the back” of the mortgage companies; like “I got your back” means that you are watching out for your buddy or friend. Same deal here.

The mortgage companies could only sell what they could be supplied; in this case “insured”. The investors basically are the insurance for the mortgage deal between the borrower (you and I) and our mortgage company. If I as the borrower default (quit paying), then the investors reimburse the mortgage company for all of their losses in the default process. Like a big insurance policy.

So what happened is that greed got the best of The Pushers; and they loosened their “terms” e.g. their standards for underwriting mortgage deals. They introduced so much more risk to themselves by letting people have mortgages that they would have never extended in the past. Never!

So the pusher (dealer) is always supplying to the addicts, and the addicts are lined up around the block.

The pushers could have stopped it; but because so much money was being made, they couldn’t see past the 3 or 4 year feeding frenzy. The demand was there, many became additcs.

So unfortunately what has been created are many crack baby mortages that have grown up now. Crack babies are harmless when they are babies; but when they grow up, they often explode or fall off into the deep end. That’s basically what’s happening to these mortgages.

Addicts are still addicts and can’t afford what they have and the pushers who have been their friends for 3 or 4 years are no where to be found. No one is capable or has the means of taking care of the crack baby mortgages.

Here comes The Fed.

The Fed -

The Feds role now is to round up all the addicts, pushers, and crack baby loans to the tune of 2 or 3 trillion dollars. All coming from your check and my check and our kids checks, and our grandkids checks, and probably their kids checks.

The Fed watched the economy pump up with the housing boom; but didn’t analyze the mess that was creating it. It was all too good to be true.

Their only solution is to print more greenbacks, dilute the dollar, and tax you and I to pay themselves back.

It sucks but it’s the real deal.

Remember one thing - no economy will ever stop me from chasing dreams. It shouldn’t stop you either

Hit me up.

If you don’t know Gary Vanerchuk you should. I...

Fri, 19 Sep 2008 20:24:07 -0400

If you don’t know Gary Vanerchuk you should. I don’t know him personally, just through the webs, but man is he an inspiration. I dig this video.

*Warning - if offended by language, there is some

Guy Kawasaki tells us all how he wants to be pitched. I love...

Fri, 19 Sep 2008 18:42:00 -0400

Guy Kawasaki tells us all how he wants to be pitched. I love how he calls BS on so much. This is good to watch if you will ever be looking for capital for your startup.

Part 2 and 3 are below.

Part 2

Fri, 19 Sep 2008 18:39:52 -0400

Part 2

Part 3

Fri, 19 Sep 2008 18:38:18 -0400

Part 3

@stein I get the internets from this fine coffee shop :)

Wed, 17 Sep 2008 20:27:38 -0400

@stein I get the internets from this fine coffee shop :)

It’s day three and the meter isn’t turning at my...

Wed, 17 Sep 2008 20:20:13 -0400

It’s day three and the meter isn’t turning at my house

The $100M iFund

Wed, 17 Sep 2008 10:44:29 -0400

I know that it’s been active for a few months, but I ran across a post that linked to the new iFund blog which lists some new and exciting companies that KPCB has funded recently.

Out of this bunch, I like iControl. The cheaper and easier that they can extend services like iControl to consumers, the more traction they will get. It can’t be complicated and expensive like most of the existing services are. If they can pull it off, it will also force the ADT’s of the country to take a look at that legacy business model they’ve been leveraging for so long. I like the idea.

I personally think KPCB setting aside a fund to target innovation and development on the iPhone is great. It’s motivation and world class support for entrepreneurs to convert some ideas into apps which is always a plus.

KPCB’s iFund philosophy

Cloud Computing at Web 2.0 Expo

Wed, 17 Sep 2008 09:30:35 -0400

Web 2.0 Expo would be fun; it’s session after session of people and material that I follow; like this session that Albert is doing on cloud computing

continuations:

Today I get to give a talk about a topic that I am very excited about: cloud computing. As I scanned the program at Web 2.0 Expo I found that there are 10 presentations with ‘cloud’ in the title and I suspect that many more will mention it. While it has become a buzzword and may therefore suffer the fate of other buzzwords, I am convinced that the basic ideas behind it are sound and will have profound impact on everything we do (I already had a series of posts on that but will sure revisit often). In my talk today I am going to set out 4 principles that together I believe define cloud computing. I will post these here over the next few days.

It’s day two for us with no power, Ike nailed us in the...

Mon, 15 Sep 2008 20:53:04 -0400

It’s day two for us with no power, Ike nailed us in the midwest with 70 mph winds

This is basically the application I had spec’d out about a...

Mon, 08 Sep 2008 21:58:10 -0400

This is basically the application I had spec’d out about a year ago, but quickly realized that it will be years before “corp” is ok with their employees using this type of application. There are many who don’t even allow IM; this is way beyond IM. I think if small biz wants to be private, they should just protect updates in Twitter.

Yammer has a tough nut to crack with corp and must differentiate themselves from Twitter to make small biz’s get it and migrate.

I think there is so much potential for corp to grow and learn from if they encourage their employees to use apps like this; that potential is what made sense for me to go after. But there is so much old school thought that still manages corp that is really tough to navigate and convert.

If you are a CEO or even a manager, you should at least watch the Yammer demo; he uses some great examples to illustrate potential.

What I wanted to do was expose some great data analytics through the UI based on the company content over time. If participation and employee adoption was high, the analytics on the data would be priceless. There is so much mis-communication in corp and I think a tool like this could really close some gaps. Heck, I would even give incentives to employees to participate.

My suggestion to Yammer would be to focus efforts in the Valley; where execs and CEOs are much more liberal in the workplace. Good luck!

Yammer can best be described as a private Twitter for the office. They launched a minute ago, if your a small business I urge you to check it out. Their interface is seamless and they already have a mobile application.

Cappucinno anyone?

Sun, 07 Sep 2008 23:34:00 -0400

Very excited about the launch of Cappuccino by 280North.

280Slides is built with it and it’s amazing how close the design and function is to Keynote on the desktop.

Anyone experimenting with Cappuccino yet? Let me know, would like to talk.

Lessons learned in southern California

Sun, 07 Sep 2008 13:04:00 -0400

As you can see in the pics below I spent the last week in southern California; half business half mini-vacation.

I wanted to share a few thoughts on how I as a mid-westerner viewed life and business in Orange County. This is quick with not much thought.

Life:

1. The superficial gene is real and exists in all social classes of the Orange Co population

2. Time seems to slow down

3. 90% of Mercedes Benz income has to come from this one county - I actually overheard a 40k /year employee seriously shopping for a new CLK; and she called the Lexus a Camry with extra cup holders. You just don’t see that here. Funny.

4. People are generally not as friendly (there were exceptions in business) - I think this comes from people who have always lived there not realizing that there is an entire country of states to their east. Like the world exists of the state of California only. Just my impression.

5. Reasonable housing doesn’t exist

6. Beaches are amazing; so different than what I am used to

7. Surfers take on more risk in a day than some take on their entire life

Business:

1. Opportunity is larger - From a start-up perspective I think this is natural with bigger businesses and bigger money in any particular demographic. People are looking for deals everywhere; even in the OC.

2. Cheery business environments - I had meetings with three different companies in three different offices and in each instance the entire organizations appeared to be overly cheery and optimistic about everything. I don’t think this was because of my visit, I just think they work that way. I think the west coast probably does this better than the rest of the country.

3. Commutes suck BAD

4. Work hard play hard - they get it

5. Less analysis more action - Business people seem to think less and act more often. Again, only saw 3 companies, but that attitude existed in all of them and I am glad I got to see it.

For me the OC is a nice place to visit, but probably not somewhere I would want to call home. I would love to do business there because of all the points I listed above. I honestly didn’t see much I didn’t like on the business side.

Nice, but not ours

Mon, 01 Sep 2008 17:26:06 -0400

Nice, but not ours

Laguna Beach CA

Mon, 01 Sep 2008 17:09:05 -0400

Laguna Beach CA

We are here

Mon, 01 Sep 2008 12:57:05 -0400

We are here

Indian Politics

Thu, 28 Aug 2008 18:12:29 -0400

I had a very interesting political discussion today with our director of development who happens to be from India.

I had a copy of today’s WSJ on my desk and I asked him if he followed much of the US political race; he answered not really, and added that it was a little confusing for him.

I answered, don’t worry, it’s confusing for all Americans too…. :)

We always have great discussions that lead to Indian cultures and traditions, which I typically drive towards because I am always trying to understand it more. This one lead right into the political structure that exists there.

If you are from India and happen to be reading this; please take no offense, but please try to understand that as an American it’s just as difficult for me to fully grasp your culture as it is for you to grasp mine.

What I learned today that political leaders are often movie stars! WHAT?

No lie, movie stars often turn into political leaders because they are idolized and thought to be able to make a reality of who or what they portray in movies. Indian movies are always happy/fantasy stuff, never “real” or based on reality (usually sad drama). So there evidently is always this super human fantasy situation that the people of India love and rally behind.

These movie stars have no political backgrounds at all, but because they are able to succeed and lead society in a movie, the people believe that they can do it in reality.

Very odd to me, but a reality. I guess the closest thing that has happened like that is the “Arnold” situation in California.

So here is a very real story of an Indian movie star turned politician that my friend at work showed me today.

http://www.hindu.com/2008/08/27/stories/2008082757380100.htm

By the way, it took 120 acres to hold all the people for the rally he had.

Impressive!

Met with a good friend about the housing situation, the economy, the problems, the opportunity.

Tue, 26 Aug 2008 21:37:37 -0400

This is great! willw: Neatorama » Blog Archive »...

Thu, 21 Aug 2008 21:57:49 -0400

This is great!

willw:

Neatorama » Blog Archive » It’s not a glitch. He’s just that good.