patrick.net

Just checked Uhauls site,

4-5 bedroom truck from SF to Phoenix $2170

4-5 bedroom truck from Phoenix to SF $199

Now that's really really odd, especially given the high salaries and positive intangibles of the BA. Oh, now I get it, the BA companies are subsidizing the moves, and Phoenix isn't. That must be it.

"4-5 bedroom truck from SF to Phoenix $2170"

Uhaul knows that Bay Area residents will settle for nothing but the best (except in the case of housing, and choice of cities to flee to when they can no longer afford to live in the Golden Land), so these trucks departing SF are actually upscale luxury Uhauls with Mercedes engines, deluxe leather air-cooled seats (so the Arizona sun won't burn their precious asses), and built-in espresso machines.

Just checked Uhauls site,

Now that’s really really odd, especially given the high salaries and positive intangibles of the BA. Oh, now I get it, the BA companies are subsidizing the moves, and Phoenix isn’t. That must be it

The price difference is big, and probably reflects some of the net outflow of people from the BA. However, very different prices like this are common in logistical network optimization pricing functions. The fact that the BA is so much bigger, and has more absolute demand, would account for a need to discount trucks inbound into the BA. The same thing is true in rental cars, airline pricing and schedules, or any other system that needs to move around assets.

Uhaul knows that Bay Area residents will settle for nothing but the best (except in the case of housing, and choice of cities to flee to when they can no longer afford to live in the Golden Land), so these trucks departing SF are actually upscale luxury Uhauls with Mercedes engines, deluxe leather air-cooled seats (so the Arizona sun won’t burn their precious asses), and built-in espresso machines.

And gold-threaded tires for Bay Area's gold-paved roads.

H.Z.

I agree with your read on GDP deflator data. The problem with CPI is the inverse, however, vis-a-vis substitution effects. CPI tends to (sometimes dramatically) overstate inflation during certain supply shocks. This is some of the reasoning behind removing food and energy. Although energy demand is inelastic, a lot of substitution between energy types occurs fairly quickly in response to price changes. These numbers force up CPI but have less of a real impact on the aggregate national income.

Whether we like CPI or not (and I don't) is a bit moot because so many contracts and entitlements are tied to CPI; so it affects us nonetheless.

The fact that the BA is so much bigger, and has more absolute demand, would account for a need to discount trucks inbound into the BA.

Or--I bet there's so many trucks heading out of CA they need to pay overhead for shipping available ones in? Still, that price difference is outrageous!

hmmmmmmmmmmmmm, now why would that be?

Not to be devil's advocate, but even if the emmigration rates were exactly identical, there would be more accumulation of trucks in smaller cities than larger ones, simply because of the math.

and has more absolute demand, would account for a need to discount trucks inbound into the BA

Huh? Kind of an inverse supply/demand theory?

Huh? Kind of an inverse supply/demand theory?

Logistical optimization of asset placement trumps supply-demand. You can't supply-the-demand if you don't have a truck there. So long as the revenue less cost of the discount is above marginal costs, you can discount to try to get something (0 is better then

Logistical optimization of asset placement

I wouldn't want to say that five times fast ;)

(0 is better than

[one more time] (0 is better than

{time to work anyway}

To be fair, Phoenix also gets a lot of immigration from other places. It would be more telling if we get the same data from other city-pairs like NY/SF and LA/SF.

Bay Area residents will settle for nothing but the best (except in the case of housing, and choice of cities to flee to when they can no longer afford to live in the Golden Land), so these trucks departing SF are actually upscale luxury Uhauls with Mercedes engines, deluxe leather air-cooled seats

There's a new business model realtors can move into...showrooms of moving vans, "staged" to suit individual tastes...modern, tradtional, or sporty--there's a van for every lifestyle. Rates begin at $5/mile, financing available.
"Flee the Bay Area in style: you're moving up--not moving out!â„¢"

NYC - BA, BA - NYC roughly the same cost

BA - DALLAS $3699
Dallas - BA $860

c'mon surfer-x. i know you've had linear algebra somewhere in your schoolin'. You know that mathematically these systems of equations often yield non-intuitive results.

Here's some local stats on population changes.
http://tinyurl.com/9vqgf

Judging by Surfer-X's findings, I'd guess the exodus has picked up recently.

these systems of equations often yield non-intuitive results

Randy for Fed Chief, Randy for Fed Chief! Let the nomination process begin!

Randy for Fed Chief, Randy for Fed Chief! Let the nomination process begin!

Ok, I deserved that.

So the problem with looking at u-haul data is this: trucks don't frickin only go back and forth between 2 cities! a truck can go from the BA, to Phoenix, to Dallas, to NYC, then to Buttcrack Indiania. There are so many variables that when they put this crap in their big, expensive computers, they get wierd "proper pricing" out the other end. The pricing may have everything to do with demand, or nothing to do with demand. Some cities are just natural nexus points, and lots of trucks move through them.

equity refugees from California

My new favorite saying.

Randy H. again Sir your knowledge of these types of matters is astounding!

Randy H. again Sir your knowledge of these types of matters is astounding!

Sir? Randy H, KBE?

allah,

my point is you cannot prove or disprove anything with rental quotes. the prices may be because of what you say, or may be because the city is accumulating trucks (or short of trucks) because it is just unlucky in the grand scheme of u-haul's system. demand is not the only thing driving prices of trucks; there is a logistical force at work too. when u-haul optimizes pricing, they can purposefully take negative revenues on some runs because it increases revenues by more than that in others.

Parsed the pop data and here's what is says:

47 cities together lost 1.8% of their pop

and

47 cities gained population, 2.1% rise.

Kind of a push in my book. So much for the "exploding" population element to BA RE prices.

Wayne, take if from me, tell them that it gets to -20 below in the winter, for 6 months, that the re-introduction of the grizzly bear and wolf packs and adversely effected prop. values, and that you just plain can't get good brie there.

Wayne, nooooooooooooooooooooo

"So the winters have lots of bright sunny days, but nights are pretty cold. I was able to run or hike very comfortably last winter,"

Hey, sounds just like the So Cal high desert...well, except here we have all the sex offenders, west coast rednecks, and other assorted derelicts.

allah, all i'm saying is that may not be price reflective. i've worked designing these types of systems (although not for rental trucks), and the price is not indicitive of micro demand in many cases. trucks can be out of place because of non-demand related reasons.

Allah, RandyH, sorry man, just thought it was odd that the prices were so skewed coming out of Ca. Didn't mean to cause another battle royale :)

Allah, RandyH, sorry man, just thought it was odd that the prices were so skewed coming out of Ca. Didn’t mean to cause another battle royale

I read that the interstate freeway system was designed to accomodate emergency evacuations. For example, traffic is directed to use all lanes (inbound and outbound) to leave the city in case of an approaching hurricane.

I wonder if we will see that on Bay Area freeways if the equity refugees need to leave quickly in drove.

How? Trucks don’t drive themselves…Someone needed (demand) to drive the truck to where it is now. Now there is one more (supply) truck there then there was before and one less truck where it was before (again supply).

Sorry allah, it doesn't reduce so easily. Not only is the relationship not directly proportional, but there are other heavy variables in the equation. Systems I've designed for this purpose must account for minimization of variable costs, which include relative costs of maintenance centers, ages of fleet, rate of retirement of fleet and introduction of new fleet, cost of no-revenue conveyence (flying empty planes, hiring truck drivers to reposition, etc.). All this stuff, when optimized, makes your assumptions about price false.

If you really want to learn about this stuff I recommend studying transshipment problems, shortest path problems, equipment maintenance and replacement problems, and maximal flow problems (perhaps even generalized network flow problems). Cliff Ragsdale is a author to reference. This stuff is really cool if you like math and are excited about suprising, counter-intuitive results. One of these I set up for a regional airline, just for example, had over 1,200 linear constraint variables. U-haul would have many more for their network.

Randy, the model is still pretty much a linear system, right?

And remember in the desert you can remember your name ’cause there ain’t no one for to give you no pain

Ahh the 70's, replusive music, replusive people, replusive cars, well, just replusive. Odd that the boomers are cramming this shit down their kids throats. Here's a clue people, the 70's were never cool, they never will be no matter how much the GAP wants you to think they are.

I wonder if we will see that on Bay Area freeways if the equity refugees need to leave quickly in droves.

The diamond lanes will be reserved for multiple mortgages/HELOCs only.

The diamond lanes will be reserved for multiple mortgages/HELOCs only.

But if you have NAAVLP, you can use the diamond lanes "solo".

Randy, the model is still pretty much a linear system, right?

In practice, most are implemented as non-linear systems. But we use linear systems to model, approximate, and test assumptions in the design phases. The non-linearity comes in with physical dimensions, where orders of power ususally come to play. But, on the drawing board we can often reduce non-linearity to linear approximates. Even in a linear system, price is not directly proportional to demand because of variable sensitivity.

Someone traded $1B worth of XOM in one fell swoop today. Crash or not, things do get pretty weird in October, Peter.

Yes indeed. Three more trading to October expiration. Red Alert! All hands to battle stations!

In practice, most are implemented as non-linear systems. But we use linear systems to model, approximate, and test assumptions in the design phases.

When you implement your portfolio optimizations, do you use QP? Or do you use some form of simulations?

When you implement your portfolio optimizations, do you use QP? Or do you use some form of simulations?

***not investment advise***
I use Crystal Ball for statistical simulation and Mathematica for linear programming, which I apply to a Black-Litterman model. I'm just experimenting with this on my own, not for any paying clients at the moment. I bring everything together in Excel. I also use a big whopping FFM model in Excel which I built some time back on someone else's dime. I know a lot of folks use Matlab though.

For price/cost optimizers I find more people using products like iLog's, which makes my job easier. I used to have to do the math, but now it's just a design problem.