Marty

http://Onceuponabid.com

• eBay Is a Losing Bid - Barron's [view article]

  Incredible potential, incredibly being wasted in my opinion. Great people working at ebay, lots of good idea burried , its customers ignored. Not sure what will turn this around but I wouldnt count them out, they need to get back to the roots of how they grew, from excitement, word of mouth and making Ebay a great place everyone wants to be.
  
  Another huge issue is that with seller contentment way down, other factors like the worst economy since the Depression have Ebay taking the heat for all problems even though generated by less consumer spending in a bad economy.
  
  While people do unload junk when the economy slows down there seems to be fewer reasons to unload it on ebay. Few if any bids, constantly changing direction etc. The fastest growing areas of the market (local trading and buy online pick up in person/store) were persued by Ebay as "Ebay Local" announced, then burried while Craigslist grew at 90% over the last few years.
  
  The potential is here, I am not really sure what the problem is. You need people that understand why Ebay worked to replace the consultant types, or at least take them somewhere and hit em in the head with some water balloons! LOL
  
  Marty Sep 14 08:52 AM

• A Rustbelt Revival: From Doom to Boom [view article]

  Excellent article. Finally a glimmer of good news that isnt just a misleading statistic. This subject deserves more research thanks for your thoughts here :)
  Marty Sep 07 09:47 AM

• Housing Crisis Likely to Wipe Out Two Decades of Family-Earned Wealth [view article]

  Id argue that housing is sympton not a cause of the wealth wipe out.
  The outsourcing of jobs and inflation running well over announced rates combined with a lack of investment in this country has produced a situation where costs of living are way in excess of the ability people have to pay their bills. Sub-prime borrowers were just the weakest link. Look at AMEX and other banks recent news on their prime borrowers increasing their defaults. When gas, heating oil and the cost of food soar to create another monthly mortgage amount something has to give.
  
  Much of the divide between the "high saving types accusing the younger generation" and the "wasteful types in the young generation" is merely because the former rode the bubble up and cashed down.
  
  My dad bought his first home for 20k, sold it for 60k, his second for 107k (a real stretch for him at the time) and sold it for $450k.
  
  Many people like him only had money because they could tap the equity to send kids to school, trade down to cash out to retirement.
  
  Some of this younger group gets out a college which costs 10x as much as when their parents went, into a housing market which was high and if everything else didnt go haywire they would be able to afford the mortgage as well.
  
  Right now the lack of opportunity, outsourcing of not only manufacturing but service jobs as well, combined with a total lack of investment in the infrastructure and technologies of the future here at home has led to a longer term problem that wont be easily fixed..
  
  MA in CT Aug 04 08:33 AM

• Amazon Checkout: Stiff Competition for PayPal? [view article]

  Scott, excellent post, great job with the pros and cons. I do not always agree with your analysis on things but you did an excellent job here. :) - Marty
  
  PS Are you seeing any trends with the economy from your end? Less high end buying? More emphasis on free shipping? Any movement to the Walmart/Ace hardware shop online pick up in person? Thanks! clhct1@aol.com Jul 30 10:33 AM

• Housing: No Bottom Yet in Sight [view article]

  I say we have Iraq pay back some of the War Debt. When we started these Wars with Saddam oil was at $20 a barrel. Now we have liberated them and gave them a 700% increase in the price of their #1 resource. What would have happened if oil prices stayed the same? Surely they can afford to pay back the war effort with these inflated prices.
  
  Probably the only thing I see in favor of the housing market is the extreme negativity , which usually means things might be close to a bottoming process.
  
  What we need in this country is fairly simple..
  
  1- Get these bozos out of office. Give me Obama or McCain, anyone with a brain, a mind towards tending the record deficits and working across the aisle with the other party. This is America, not red nor blue states but people that can and will work together to solve problems.
  
  2- Start Building the "NEW AMERICA" we need
  
  a- Infrastructure spending
  b- Reinvigorated Space Program
  c- Alternative energy development on a grand scale
  
  We have spent many of the last years fighting a war with no material benefit, we need to invest in this country once again and also repair our image in the world.
  
  As a CPA in the northeast I can say the economy will be a huge challenge. I see the main problem is the concentration of wealth. Through outsourcing and exporting, large companies maintain wealth but distribute to far fewer here in the US.
  
  The profits of US companies are a subject for study in themselves. In the early 1980s 85% of jobs provided a company paid for pension and most had full benefits for insurance. Now 15% have company pensions and maybe 20-30% have full medical coverage. The more you take out of the pockets of workers the more "companies seem to earn" the multiple of which accrues to shareholders.
  
  401k wealth for most is a myth. 52% of 401k holder took a premature distribution last year. People are tapped out, this country has suffered the biggest period of mismanagement in its history.
  
  What worries me most is the group that stands to benefit from keeping the status quo. Before the last presidential election they pulled the Thurs evening Bin Laden video out, this time from what I read and hear from others it will be worse. An incoming Obama might lead to a pre election war with Iran or an elected Obama a post election pre inauguration war. Those with the money and power dont give it up easily to those seeking the level playing field and America for all.
  
  Id just remember what I said and hope that come next January you can all say, gosh he was wrong (I hope). IF you want a Depression the war scenario is the one way I see that happening. Absent that nightmare scenario I see either new man bringing us out of this mess.
  
  MA in CT Jul 29 08:37 AM

• Historic Financial Collapse Underway? [view article]

  Great article! I wanted to add some stuff .
  
  - In 1999 the Nasdaq was 5000 its 2200 or so now. In 1989 as the Japanese real estate bubble burst the Nikeii Average was 40,000 its 18,000 now 20 years later. Their real estate market retraced 20 years of gains as well. I feel it is not totally out of the realm of possibility that a much longer recovery trend like that in Japan can happen here.
  
  -Regardless of the economy there are other factors -HUGE outflow of investment funds to baby boomers retiring. These people were able to save more than the next generations AND had the benefit of company pensions (also invested) that will now be coming out of the market just as new money in gets tougher as people cant save.
  
  -Additional Risk - State and Local revenue -People are not driving on toll roads as much and they need to raise tolls. Property taxes are going to be a nightmare to collect, and sales taxes are down. There are some serious risks in that environment to state and local Govt spending (and related bonds etc)
  
  -Not sure if I agree on the gold thing. The last year has shown you might have been better off buying food that you can store , things like rice , flour etc LOL But there is a valid argument in the currency collapse market.
  
  THOSE THINGS SAID...
  
  As a CPA in the northeast part of the country I have seen this mess coming for over 2 years. Just like the signs were clear to me 2 years ago I am seeing some limited signs of the seeds of recovery taking place. It could very well be far off but let me tell you about the few positive things I have seen..
  
  1- The small business credit crunch seemed to ease when the Fed lowered rates. I dont know why but between Oct 07-March 08, it seemed like noone had money, now people seem to be hanging in there .
  
  2- Some clients are reporting better sales (surprising even themselves). In the last 2 years I have not had a handful of people telling me anything good the same day but I am starting to get those reports.
  
  3- Some new business formation is going on.
  
  4- Looked into details of some financial stocks reports. IT appears to me that places like Citibank and Merrill Lynch are 6 months away from a turnaround. For example, Merrill has reported 40 billion in some odd losses already. They only have 4 billion or so left in CDOS in total.
  
  5- Private people (like Boone Pickens for example with the Energy plan) are starting to step up to the plate with ideas.
  
  There is an all bets off death scenario though. That is if we get involved in another war. Then I think its over.
  
  Id like to state one more thing..
  
  from a year ago to about 6 months ago the Govt essentially lied about inflation, unemployment and the jobs market.
  
  Now the facts are out there. At least people are playing cards with the reality deck now. The risks are out there. Just articles like this one might show a bottoming process.
  
  I have been very negative on things but call it as I see it. I do see some things moving in the right direction. It might be a dead cat bounce as they say but I am hopeful that we are wrong and things will turn, everyone makes out better that way and ill eat crow anyday over not having anything to eat!
  
  Marty Jul 20 10:32 AM

• Innovate or Die: eBay at a Crossroads [view article]

  Randy interesting comparison. It is funny you chose Kodak. A simple well done commercial showed me their recent turnaround and I think they have finally "got it". As an aside Ebayers should check out there advertised special to hook you into their new product at kodakoffer.com. Seems like a great deal that even I (with 4 printers already cant turn down LOL)
  
  While I agree with some of what you say about Ebay. I think the innovation is closer than they think and the problems different than you think.
  
  I do not think the new emphasis on fixed price will kill the higher margin auction business. I think in the long run it will help improve auctions to be just for those items that belong on auction , which will benefit everyone. I see some huge positives, some things they are missing and some mistakes.
  
  Positives..
  
  1- STORES BACK IN CORE-Moving back towards stores in core search with the new Italy model making store items 30 days fixed price items for store like insertion fees based on store subscription level.
  
  2- INTERNATIONAL EXPOSURE-(Randy dive into this one on your blog)- This is a total homerun and I almost missed some of the reasons it would be. Stage one our ebay.com items can be promoted on the UK site. Our intl sales have really picked up, but we are also getting better regional indexing in search engines AND there are people that hop around ebay sites that find our stuff on the UK site, like ebay.it buyers and others. If this program expands, this will ping-pong people all over the place in terms of buyers and items. It is really working and Id love to share some stats with you for review.
  
  MISSING...
  
  1- EBay Local - After announcing this program at Ebay Live they died on it. Currently shop online pick up in person is the fastest growing area of the internet leading players like Walmart.com and others with 40% plus growth rates. While not perfect for all Ebayers all of Ebays properties play right into this idea. From Stubhub's tickets to larger local items to vehicles , educational specialists and trading assistants , the time for local hubs has returned. In my opinion they are missing a huge opportunity that an Amazon cant match.
  
  MISTAKES...
  
  1- DSR/FEEDBACK - While it is clear there have been some positives from the DSR/Feedback changes I think the effects on the community have been devastating in many cases. I also think the goal to show more differentiation of sellers is really not being met.
  For example, sellers that worked hard and had 99.9 percent feedback ratings, found their nuetrals become negatives in the calculations and a new 98.4 percent rating. That does nothing to discourage buyers but has upset that seller. Second, and this is something Id love your opinion on. Buyers seem to buy more items from larger sellers with lower DSRs and lower feedback despite the search exposure decrease they are supposed to get. In looking over some stats it seemed to me that (as reported by others) larger sellers fell in the bottom 50-60% of Ebay sellers in DSRs and in feedback and not only had high sales but the fastest increasing sales. This shows me that buyers really dont care all that much if someone has a 4.9 or a 4.6 or 99.9 or 98.5 feedback. I worry that the effect on the community is just another thing that is forcing people off the site. Its not one thing its many things over time. I want those people here as they are providing diversity of items and they are also buyers.
  
  Thanks for your thoughts on things.
  
  Marty Jun 11 09:44 AM

• Donald Trump on Oil [view article]

  Trump might sound like an idiot with that talk I admit, but there is a whole slate of fools on that channel believing those GROSSLY INACCURATE inflation statistics.
  
  The facts are in... The Govt stated Gas prices fell last month when they went up 12%!!!!!!!!!!!!!!!!! (IN A MONTH).
  
  When asked about it the Govt mentioned "seasonal adjustments" HUH?
  
  So as Mark Haines pointed out, we can go up to the pump and ask for the "Seasonally adjusted price".
  
  Apparently food inflation is somewhere in the neighborhood of 40% now.
  
  People need to wake the heck up. Cant anyone do simple math?
  
  In any case Im tired of yelling about it, I give up the morons rule
  
  Marty May 19 08:27 PM

• Don't believe Paulson: S&L 2.0, the Bank Failure Redux [view article]

  I would like to comment on this comment " inflation is going to get out of control in the near future. Does this also apply to home prices?"
  
  One would think this would happen. The problem is , the things inflating are the things people have to pay for or the things they own. Without the WAGE inflation there is no ability for prices on homes to go up. In the 70s and 80s there was wage inflation.
  
  I will give you a simple example.
  
  During the "terrible inflation of the Carter years" (As we are told to call it), peoples wages ALSO went up. Social security was indexed 75% over 10 years. At the end of the inflation, everyones income was up 75%-100% or more. Now, the higher incomes could easily pay down the mostly fixed debts and that allowed asset prices to increase. When your costs go up, but your income does not (even further distorted by todays lack of benefits) prices on homes will not go up because people cannot afford them.
  
  This is a real mess, and it will take good leadership. The concentration of wealth is so great this time that even the upper middle class is in trouble.
  
  Marty May 17 09:53 AM

• Don't believe Paulson: S&L 2.0, the Bank Failure Redux [view article]

  Thanks for one of the most intelligent articles on these subjects I have read. I was as a CPA in the Northeast and my contention is that this crisis is not a subprime mortgage mess at all that it is in fact unnanounced inflation and the corrosion in wages/benefits for the working class that is leading to all these problems we are seeing.
  
  Just in the last few days the Govt announced inflation was 2.4% and gas prices FELL last month!
  
  In a nutshell, inflation has been running rampant. It is the additional costs layered on by inflation that have left people unable to pay their bills, not their mortgage. Between 1978-1986 the Govt indexed social security 75% to keep up with inflation. In the last 8 years that number has been 25%.
  
  So lets find the 2-3% inflation. Here are some real numbers that people are paying in my area.
  
  Heating oil up 350% in 10 years
  Gas up 300% in 10 years
  Medical insurance, family coverage up 500% in ten years
  Taxes in my town up on average 86%
  Electricity in much of CT up as much as 74% in the last few years alone!
  Food inflation, heck we have things that went up 30% in a month but most food items are at highs except for meats because they are killing the animals as the feed is too expensive, wait til fall.
  
  Thus with technology and outsourcing putting a lid in wages ,there is no pressure to raise wages. Real income is declining much faster than the Govt states. 2 days ago they said it declined 1 % based on 2.4% inflation. If inflation is 10% real income is declining by 9%.
  
  People are making less, not more, have less benefits, and less pensions than in prior years. Good paying jobs have been replaced by jobs with lower pay and less benefits. Please note the recent statistics in BusinessWeek in the differences between men and women in the job crisis and how women have less job losses because they are working in those service jobs which often pay less.
  
  In my client base I do not see any problems with subprime loans. I see a lot of people cutting their spending, trying to keep their businesses running.
  
  The ultimate irony is the same Govt that told you the economy was doing well, the jobs market was strong and inflation tame, is now handing out money telling you to spend it.
  
  This is way worse than people think. Student loans might not fund. Those auction rate securities have 320 billion in peoples funds frozen, some earmarked for college. Inflation/foreclosures... pullback is now entering round two. In NJ they have to raise tolls because people are driving LESS and paying less tolls!!!! Driving is way down yet fuel prices soar.
  
  Only the super rich are making it this time and they will watch their saved dollars depreciate right along with eveyrone else.
  
  Id love to talk to you about what I am seeing and compare notes. My email is clhct1@aol.com
  
  Marty May 16 09:24 AM

• Amazon Toying with Vertical Integration [view article]

  Very well done article, thank you! Whatever Bezos is up to it is always interesting. I have always enjoyed shopping on Amazon and keep an eye on what they are doing since I am a seller on Ebay. The info on Booksurge is intersting and makes a lot of sense.
  
  One risk I see though is that much of Amazon's recent success came from a few mistakes Ebay made by allowing millions of items to transition off the site when it raised fees and made some comments about its own stores product that left some bewildered.
  
  However, Ebay has lowered fees, attracted many of the larger sellers back and also is working on numerous trials which seem to imply lower fees are coming (from blog posts I have read). It is not so much the people that had moved but the line of people that follow when people have success (as they have on Amazon). When this process reverses ,Amazon will lose that surge to the growth profile.
  
  Marty Apr 26 09:42 AM

• Sell on the News: eBay Shares Slide Today [view article]

  I am an Ebay seller, generally supportive of the company but I believe in the last few years they have lost their way trying to become and Amazon clone. First some stats taken from Ebays Quarterly reports. The percentage of registered users staying active is dropping fast.
  
  In 2006 , when I felt Ebay was firing on all cylinders when stores were in core user growth was humming etc.
  
  1st Quarter 2006
  
  193 million registered users of which 75.4 million or (40%) were active
  
  Two years later ...1st Quarter 2008
  
  309 million registered users of which 83.9 million were active (27%)
  
  First of all note that 116 million registered users were added but Active registered users only went up about 8 million. Those numbers show an incredibly high churn rate.
  
  In the last few weeks Ebay removed the Ebay Wiki which was built by its members (with no notice) , banned Digital delivery of items like Ebooks, templates, etc), announced they are closing down Live Auctions on the site in 8 months or so and keep moving to a homogenized look which is leaving the community befuddled (at best).
  
  At a time when the US dollar is low in relation to foreign currencies the countries users with stronger currencies cannot see US items unless they change their settings on Ebay.
  
  People came to Ebay to sell things in the new world of the internet. It was exciting, it brought a sense of connection and community. First collectibles but then a market for other items developed. As Ebay expanded worldwide more opportunity seemed to be there.
  
  Right now, Ebays mistakes over the last few years are masked by huge foreign currency exchange differences that are making the 50% of its income derived from foreign countries appear much larger and it is not reflective of strong growth in those markets.
  
  Flat earnings in EUROS for example increased 30% in US dollars over 2 years.
  
  When EBay raised fees in the fall of 2006, it lost millions of items and thousands of sellers. Many went to Amazon and other sites. They saw some success and told other people.
  
  Just as Ebay was formed it can unwind. This is my worry.
  
  It is my opinion that on the current track , Ebay will totally lose its ability to turn this around as user growth continues to be strained.
  
  You cannot have those levels of turnover and succeed. This is exactly what brought down AOL when even MSN couldnt catch it back in the days of online services.
  
  I sell on Ebay, and think that led in the right direction, they could re-invent the glory of what they were. My advice would be ...
  
  1- Stop trying to stamp out the diversity
  
  2- Open up the Intl markets to cross border trading instead of protecting them
  
  3- Buy the remaining 80% of Mercado Libre , the south American Ebay and open up those markets .
  
  4- Let all the people connect, and focus on the connection of the world that is found on Ebay through products, ideas, services etc.
  
  5- Integrate all this with their World of Good and Givingworks programs already active in doing good things world-wide.
  
  6- Use IBMS "MAstor" voice translation program to develop international trading on a new level.
  
  7- Develop the Local Markets as they did in 1999-2000 when they were too early (as broadband growth was minimal then). Ebay Local, announced in 2007 was supposed to be coming but then again it might have been canned. With shipping costs an issue lately , local delivery options and just in time buying could be a whole new market.
  
  I love the company, hate the direction. I dont pretend to have all the answers or always be right but I can say I have a good feel for those around me (fellow sellers) and this is not the correct path to grow the site.
  
  Marty
  
  Apr 18 08:32 AM

• e-Commerce Set to Soar in 2008 [view article]

  Scott , one of your best posts yet with some excellent info! Question for you! Whenever I look at the breakout of the online retail growth I see computers, electronics, Gaming and games etc making up for a large chunk of the growth. When I last saw this breakdown I think Apparel was the only one other than these that broke the top 5 with most having much lower growth if any. Since the big players have such a large role in computer , electronics and gaming do you figure that other online retailers will see a somewhat slower level of growth? Its hard to extrapolate exact data of course but if I see for example Gaming growing 34% and it is already near the top showing huge numbers that growth alone is skewing the numbers.
  
  I think most people see 17% and think health growth across the board when in fact its 30-40% on the already massive electronic, iphones, computers, gaming and much less in other places.
  
  Thoughts on that?
  
  Thanks for all the info you provide. I love the charts above!
  
  Marty Apr 09 08:18 AM

• Not Seeing a 'Better & Safer' eBay [view article]

  Well I dont think its all that bad Dinah! I have seen almost all those problems you mention from time to time, but I want to add my one concern.
  
  All the efforts at security, DSRs , feedback changes, punishments for sellers etc, have left the site a battlefield instead of a rich farmland that will grow the business in the coming years.
  
  Announced improvements never seem to materialize, while the site emphasizes these areas to improve "the buyer experience".
  
  Most sellers do not feel plastering ads all over the site is improving the buyer experience. Many large sellers didnt have great feedback but you know buyers kept buying from them anyway. Just as Walmart has that 70% or lower customer satisfaction rate yet keeps bringing in the buyers.
  
  Too many changes of one kind and not enough excitement and new ideas coming forward. I can give many examples but Im all talked out on this subject. Like everyone else, just keeping up with the changes is a full time job.
  
  Perhaps Ebay will finally finish this cycle of change and move on to better things. The site still inspires passionate comments both positive and negative and it will only be when everyone is silent that the opportunities will end.
  
  Marty Apr 07 08:08 AM

• "Reluctant Banks" Let Defaulted Borrowers Stay in Homes [view article]

  I continue to argue it is not a "subprime mess" or "housing mess" at all. Rather it is rampant inflation running 10x the Govt announced rates that has most people in the middle class running out of money to pay their bills. In the last 8 years the Govt CPI has totalled about 25% (and this is what Social security recipients received). In that time Heating oil is up 250% , gas over 200% , medical insurance for a family up 300%, most food items, stable for years are now at record levels with Milk going up 30% in a few months alone. Electricity nearby rose 74% in one year. Taxes in my town up 86% over 10 years. Before the housing problems started, the national savings rate turned negative in 2006, for the first time since the Great Depression. Bottom line is most of the news is Bull.
  
  In the past inflationary period of the late 70s to early 80s , the CPI was 75% and that is what social security recipients received. People were getting raises of 6-9% per year. When the inflation ended they used their new higher salaries to pay down their mostly fixed debts. Now due to outsourcing and technology there is a lid on wage inflation. People are going backwards in income while their expenses soar. Make no mistake, the prosperity of the last 6-8 years has been on credit cards, home equity loans and bogus profits built on both. I see this first hand as a CPA in the northeast.
  
  Having seen this downturn coming for over 2 years, I now see small signs of bottoming. It would be nice to see money spent on infrastructure, technology (alternative energies, renewed space programs , high speed transportation systems and such) as things turn since this country has not invested in itself in many years. This would aid the turnaround and put things on a firm foundation.
  Marty Apr 05 08:56 AM

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