Category Archive: Economy

Debt vs. GDP for AAA rated countries

Yesterday was a big day for the US’s credit rating, and not in a good way. Credit rating agency Standard and Poor’s downgraded the US from AAA, the highest rating, to AA+, the 2nd highest rating.

I wondered, what countries are still rated AAA, and what does their debt profile look like?

Not surprisingly, Switzerland and Germany are on the list, but I was quite surprised that the UK was still among the top-rated countries, along with Hong Kong and Norway. How does the US stack up against these countries?

Interestingly, the US is one of the few countries with a Debt-to-GDP ratio below 100%. I was quite surprised by The Netherlands and Norway above 400%.

It’s clear that both current debt-to-GDP ratio and the trajectory is important – I also looked at last year’s budget deficit for each country:


Now Norway’s credit rating makes more sense. While their in debt up to their eyeballs, they’re slowly chipping away at it, with a healthy 10% surplus each year. Meanwhile, the US is digging a hole, adding more than 10% to their debt each year.

It’s clear that the patch to solvency is getting the US budget back on track. With the current leadership on both sides, my confidence of this happening is very low.

Sears Recommendations

Sears and I have not gotten along recently. It took 3 separate deliveries and 1 repair visit to get the washer and dryer working properly. The Kenmore grill had to be returned because it was faulty. When I got my patio furniture home, it was damaged and had to be returned.

But the Sears email recommendations are what annoy me the most. When I bought the patio furniture, here’s the email I got from Sears.

More patio furniture? Come on Sears.

I’m not expecting Amazon-style recommendations, but this is just pathetic. Don’t make 8 recommendations of different patio furniture sets when I just bought a patio set. What about a fire pit. Or a grill. Or anything other than patio furniture.

Sears, consider hiring a more seasoned Internet marketer.

Brilliant Lowe’s Email

At 9pm tonight, received an email from Lowe’s: Send an e-Gift Card to your dad for Father’s Day and have it arrive within 12 hours. Brilliant marketing!

Didn’t work on me though. My dad is getting a card and a call.

What’s the most expensive city to live in Washington?

Following up on my last post using data, I decided to look into living expenses by city. Mint breaks down living expenses for 12 cities in Washington. My guess was that Bellevue would be the most expensive to live in, and Spokane would be the cheapest.

Monthly expenses by city


Turns out that Redmond, not Bellevue, is the most expensive city in Washington. The average Redmond resident spends almost $97k per year. Redmond beat Bellevue by $16k per year, quite a large margin.

The least expensive city: Bellingham turned out to be the least expensive city, costing $33k per year. You could live in Bellingham for three years at the same cost of one year in Redmond.

What drives the cost of living decrease?

Mint only breaks out four spending categories (Travel, Food and Dining, Shopping, and Transportation), but we can use these to identify what drives up the cost of living in Redmond.


Travel: $600

Food and Dining: $750

Shopping: $650

Transportation: $350


Travel: $375

Food and Dining: $600

Shopping: $425

Transportation: $250

Interestingly, the cost of food and dining is only marginally higher in Redmond. Food is about 25% more expensive in Redmond, while overall expenses are 3X that of Bellingham.

Transportation is the next closest category: Redmond costs are 40% higher than Bellingham.

But for more discretionary expenses, Redmond costs are much higher. Travel and Shopping are more than 50% higher in Redmond than Bellingham.


Living in Redmond doesn’t have to be 3X the price of Bellingham. When looking at core expenses, it appears it’s about 25% more expensive to live in Redmond.

Higher incomes in Redmond drive up the cost of living due to discretionary purchases. Travel and shopping are mainly optional purchases, and the higher incomes in Redmond, and the higher incomes of residents of Redmond allow them to spend more in these areas.

Which Bellevue Restaurant is the most popular?

I recently came across a site created by that anonymizes and aggregates users spending behavior. allows the public to access its data on consumer spending habits in a searchable and sortable format.

I wondered, what sort of insights can one glean from this data? I have a list of some pretty interesting analyses to do, but I thought I’d start out with an easy question:

Which Bellevue Restaurant is the most popular.

“Most popular” is a pretty subjective superlative. But Mint’s data has a pretty non-subjective measure of popularity: # of unique visitors who have made a purchase at a particular location. That’s the criteria I used for this analysis.

Two restaurants came out on top of’s visitor index: Las Margaritas and Sideline Sportsbar.

At first, I was quite surprised by the restaurants that topped the list. I thought for sure that some of the bigger-names in Bellevue would top the list over a couple of dive bars. Re-examining the criteria, cozy bars in high-traffic areas are exactly the type of restuarants that would have the highest unique visitor  traffic. Not surprisingly, Ooba Toobas is also high on the list.

Wild Ginger, the type of restaurant that I would hypothesize being at the top of the list, did rank in the top ten (8/10 on’s index). Tap House Grill was among the top 4. But it’s clear that lower-cost bars are “more popular.”

Also: note that a lot of national chains and Seattle Restaurants aren’t on Mint’s list. I’m ok with that. I’d prefer to examine local restaurants anyway.

Which restaurants are least popular?

I’ve never been to Ebru Mediterranian Grill. Maybe it’s a gem of a restaurant that few have discovered. But it’s the lowest-ranked restaurant in Bellevue, a 2/10 on’s index. Based on this, I’m not too interested in venturing out for a meal here.

Fortunately, I haven’t eaten at any of the restaurants near the bottom of the list. Maybe I have good taste. Or maybe “Halal Meats” just isn’t my thing.

If you’ve tried one of the least popular restaurants, leave a comment.

Which restaurants are most expensive?

This isn’t too hard to guess. Daniel’s Broiler tops the list at an average check size of $115. Seastar is second at $73.

Interestingly, the priciest restaurants all fell between 4-7 on Mint’s visitor index. Their steep price and lengthier dining experience keeps them from serving more customers.

Biases in the data

There are plenty of biases in Mint’s data that I accepted. The type of person that uses Mint doesn’t match the demographics of Bellevue. Mint users are Internet savvy and budget-conscious.  My guess is that Mint skews young, urban, and male. But, it’s still has a great dataset that I hope to explore more.

Economic indicator: Cargo ship containers and frequency

Last April I posted how ships coming into the Puget Sound appeared much fuller than last year. In November, I re-visited Marrowstone Island and was able to observe the frequency and cargo of container ships. Things are stabilizing…

November 2010 cargo ship:

Similar boat, April 2010:

You can count the cargo containers, but the results are similar. They’re stacked 6-high on each boat, with similar tapering towards the front of the boat. It appears cargo ships are using the same capacity per boat.

But what about frequency of boats? I counted the same number of boats (2) in both April and November. No signs of weakness, nor signs of strength.

When the boxes are stacked 7-high, or carriers add a 3rd boat per day, we’ll know things are improving.

Great Marketing: Turbo Tax delivers a great direct mail piece

I got a CD in the mail from Turbo Tax this week. It looks like free software, but it’s not. It’s the same software you can get in stores or access online. You must pay for it.

It really is great marketing. I thought it was free software, but it’s $60 for the basic version of Turbo Tax, with the convenience of having the CD delivered in the mail.

For Intuit, the makers of Turbo Tax, it may be a profitable strategy. Turbo Tax usually has a price point of $35 – $40 in stores, so this price represents a ~$25 premium. Plus, they lock in customers before they have a chance to use another service. Brilliant.

Plus, taxes are on the mind of the American public. With the house and senate debating extending the Bush tax cuts, the entire country has taxes on their mind about 4 months early.

We’ll see if it pays off for Turbo Tax. If it does, you can expect to see more software delivered in the mail… that you have to pay for.

Inside of the direct mail after the jump

Click here to read more »

Where your tax dollars go

Here’s a great breakdown of where your tax dollars are spent. Not surprisingly, Social Security, Medicare, and Medicaid top the list. Over 5% of your taxes are for interest payments on the national debt. Military expenditures make another big bucket of spend, higher than social security when each bucket is added up. The sad part is, most people think Foreign Aid is a big expense (it’s not – under 1% of taxes).

If only each family’s share of the National Debt and future obligations were represented here, we’d have the real picture (about $400K/couple all-in).

“Buying Locally” from big businesses makes sense too

I’m a big fan of buying locally. For items like food at a farmer’s market, there are huge benefits to the buyer, seller, and community:

  • Buyer: Healthier food that has not been siting in a warehouse or trailer bed for days or weeks
  • Seller: Lower costs of shipping and disintermediation
  • Community: Stimulates local economy by keeping more money in the community; reduces externalities like fossil fuels

While Seattle has double digit farmers markets, there isn’t a similar rally around other products and services based in the Seattle area, especially for big, locally-based companies. The number of iPhones in this town is shocking, as Seattleites spurn local companies HTC, Microsoft, and T-Mobile. Nobody’s selecting their airline tickets based on if the plane is a Boeing or Airbus. People weren’t flocking to wear Eddie Bauer during the company’s recent struggles.

While the benefits of “Buy Local” aren’t as big or obvious for products other than food, the community benefits just as much. It keeps more money in the local economy. It generates more jobs, keeping the local economy healthy. And a healthier Seattle economy reduces unemployment, increases salaries, and improves home values.

Buying locally doesn’t always make sense. For instance, if the price is significantly higher, your personal cost might outweigh the benefits to the community. But in instances where there is little/no cost difference, “Buying Locally” is the way to go.

I’ve already been instituting a change. When I moved here I got a T-Mobile phone. Bing is my default search engine. And my shopping on has increased, to the detriment of other ecommerce sites. Can I go further? Sure. But it’s a good start.

Thoughts about hiring a coach

In the world of work, there’s usually a defined process for hiring someone:

  1. Create a job description, including both the responsibilities of the role and the desired skillset of the person to be hired
  2. Review hundreds of resumes
  3. Interview the top X candidates
  4. Invite a select few back for further interviews, testing, background checks, and reference checks
  5. Hire the top candidate (if found)

However, in the sports world, this is rarely followed. The process is almost the exact opposite:

  1. Identify top candidate available based on no criteria
  2. Interview top candidate
  3. Offer top candidate the job

There are almost limitless examples of teams that have done this. My favorite example is Billy Donovan, who was #1 on the list of the Orlando Magic back in 2007. He was interviewed and immediately hired, only to have a change of heart, forcing the Magic to go to #2 on their list and hiring Stan Van Gundy 4 days later. Do you think the Magic had a chance to interview other candidates and really survey the coaching landscape, looking for the next best hire?

Similarly, the Washington Redskins had Mike Shanahan picked out as their desired next head coach before Jim Zorn was even fired. The Rooney Rule, which requires teams to interview at least 1 minority candidate before making an official hire was followed. The Redskins gave a courtesy interview to Jerry Gray, secondary coach. But their mind was already decided.

College sports work a little differently than the pros, where the coach is basically a mercenary, brought in to lead the paid troops, and discarded quickly for poor performance. In college, having stability at head coach is critical to recruiting as well as fundraising. Typically a search process is followed where more candidates are considered and interviewed.

Take for example, the 2001 Ohio State Buckeyes, who publicly interviewed 5 candidates before deciding upon Jim Tressell. The parade of the 5 candidates in the public was a great way to get additional feedback from across the university before making the big decision. Another easy example is at Nebraska, where over several weeks the team interviewed 5 coaches and decided upon Bo Pelini.

While the two examples cited above were successes, sometimes the interview process is more of a routine than a process. The Auburn Tigers hired Gene Chizik over highly regarded Turner Gill after the 2008 season, causing an uproar in the college football community. Fans questioned how Auburn could hire the coach with the worst credentials (Chizik) over the best credentials (Gill). Some cited racism.

Which brings me to my main point: I’m pleased with the way the Mariners filled the gap after firing Don Wakamatsu. Question the firing all you want, but the Mariners used a good approach after the firing.

By literally “calling up” Daren Brown from AAA to lead the Mariners on an interim basis, they’ve given themselves time to conduct a thorough process to hire the manager for 2011. Brown is not likely the full-time replacement as he has 2 strikes against him: 1) Never played in the majors 2) Is a former pitcher.

Some fans say if they knew they were firing Wakamatsu, they should have nabbed Buck Showalter while he was available. (Showalter was hired two weeks ago by the Orioles.) However, this is the wrong thinking. The Mariners need the right manager for this point in their lifecycle. They’re going to have a lot of young talent on the roster next year that will continue to need to be developed. An interim manager gives Jack Zduriencik time to come up with the job description, thoroughly vet candidates, and conduct interviews.

This process is increasingly catching on in MLB. The Arizona Diamondbacks promoted bench coach and former Tiger Kirk Gibson to be interim manager, and the Marlins promoted AAA manager Edwin Rodriguez to the interim post.

Let’s hope Jack Z hires the right guy for this stage of the Mariners instead of the right guy at the wrong time – Wakamatsu.

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