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What Credit Crunch?


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2008 Nov 12, 1:01am   43,263 views  241 comments

by Patrick   ➕follow (59)   💰tip   ignore  

lending

Aloha Patrick,
I am intrigued by Countrywide's offer to lend $824,000 to John in your news links and have wondered... is all this hype about credit somewhat mythical? It would be interesting to find out what people can still borrow and what they can't. I just qualified for a Home Depot credit card in 3 minutes over the phone for $7000. My score is in the high 600's to low 700's.

So my question is this: when they talk about the credit crisis what are they refering too? People with low scores and incomes that creditors can't prey on anymore, banks that have reserves but are unwilling to lend, or businesses which are going under but somehow managed to get credit even when filing bankruptcy, like Circut City? Or my favorite: the contractor who bought his debt back, featured recently in your blog? By the way how did Houdini do it? Inquiring minds want to know. Are there any more articles on this guy? What's really going on here? Someone's not playing fair in the gov't, Wall St powers that be, or...? Somebody's making the rules up as they go cause I smell a rat...

Kim

It would be really interesting to get all the readers here to see what insane amounts they can still qualify for.

Patrick

#housing

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188   PermaRenter   2008 Nov 15, 3:38am  

SiPort’s All-In-One SP1010 Terrestrial Radio Receiver Chip Gains HD-Radio
Certification

SANTA CLARA, Calif., Aug. 18 /PRNewswire/ — SiPort Inc., a leading
developer of digital terrestrial broadcast receiver ICs for use in consumer
electronic devices announced today that its SP1010 single-chip HD Radio(TM)
Receiver has received HD Radio Ready(TM) certification from iBiquity Digital
Corporation, the developer and licensor of HD Radio technology. The SP1010
single chip HD Radio Receiver provides category leading digital and analog FM
performance for the mobile, tabletop and automotive aftermarket market
segments.
“HD Radio certification is an important milestone for SiPort and validates
our unwavering commitment to delivering the highest performance HD Radio
solution,” said Mr. Sid Agrawal, CEO of SiPort. “The certification of the
SiPort single-chip SP1010 HD Radio solution gives our customers a
best-in-class solution for audio and data services on both mobile and
traditional radio platforms.” The SP1010 completed comprehensive product
qualification and has been released into full production. SiPort will begin
shipping the receiver chip in volume in September, 2008.
HD Radio was developed by iBiquity Digital Corporation. The breakthrough
technology allows digital radio signals to ride the same airwaves as today’s
ubiquitous analog AM and FM radio broadcasts, bringing additional content,
crystal-clear sound, and location-based data services. “SiPort has done an
outstanding job implementing and adhering to the rigorous requirements
specified by the HD Radio certification process,” said Mr. Jeff Jury, Chief
Operating Officer, iBiquity Digital Corporation. “SiPort’s innovative HD Radio
solution provides OEMs and ODMs a much needed single chip solution, enabling
portable as well as traditional HD Radio platforms.”
LG-Innotek is currently sampling its HD Radio module based on SiPort’s
SP1010 single chip HD Radio receiver for the automotive, tabletop, home
theatre and mobile HD Radio market segments. The company will be in full
production in Q4 2008. “The SP1010 provides a best-in-class, highly integrated
single-chip solution that allows us to deliver multiple platforms for mobile,
automotive aftermarket, tabletop and home theater applications,” said Mr. Lee,
Vice President of LG-Innotek.
About SiPort:
SiPort is a venture backed fabless semiconductor company developing mixed
signal RF and digital baseband wireless receiver chips supporting multiple
Digital Broadcast Standards. SiPort’s innovations in algorithms,
architecture, and design are the foundation for breakthrough solutions that
enable the delivery of mobile broadcast audio and data services on Personal
Navigation Devices (PNDs), automotive navigation systems, Personal Media
Players (PMPs) and other consumer electronics platforms.
The SiPort team has an enviable track record designing complex RF and
mixed-signal circuits that leapfrog current performance metrics and deliver
the best broadcast performance per milliwatt (mW). The team is focused on
enabling ubiquitous delivery of mobile digital broadcast media to all handheld
media platforms at attractive price points and form factors.

189   PermaRenter   2008 Nov 15, 6:31am  

>> Perma likes to point out when the Chinese are being shits.

That's your jaundiced view ... I agree on mortal combat point

190   Peter P   2008 Nov 15, 6:53am  

Anyway, let's hope the police will get the monster soon.

191   Rajen   2008 Nov 15, 9:01am  

Firstly someone who commented on Activity based costing does not know what that subject is. Secondly all the americans would know how vulnerable they are. Otherwise they always put themselves as those who have everything and are the king of the world.

192   Malcolm   2008 Nov 15, 9:41am  

Rajen Says:
November 15th, 2008 at 5:01 pm
"Firstly someone who commented on Activity based costing does not know what that subject is."

http://en.wikipedia.org/wiki/Activity-based_costing

Oh boy, here we go.

193   Malcolm   2008 Nov 15, 10:23am  

OK, since I'm probably not going to get an answer I'll just show everyone how a company screws itself using ABC. Activitiy based costing attempts to use a driver to allocate costs. I'll give the example of a payable's department. The company wants to know the true cost of a payables check to determine whether to outsource the function or keep it in house.

The company will add up all the costs, the footage, the clerks, the paper, the supplies, but also the payables manager which is the typical boomer overpaid slob who actually doesn't contibute that much to the process but they need to because they want to know the whole cost of processing the payable. After they've done that they divide that number by the number of checks on average or actual, whatever.

With the boomer's pension plan and all that shit we discussed above, if the number of checks is small all of a sudden they go, holy crap, it costs a lot of money to write these checks, we need to find someone out of house to do it for us. So, what ends up happening? The boomer stays on, because you need him or her to manage the outsourcing partner and the clerks are fired. Of course there is a bonus for the boomer for realizing all of the cost savings.

Rajen, would you care to disagree? Are you going to say this doesn't happen?

194   PermaRenter   2008 Nov 15, 11:56am  

>> With the boomer’s pension plan and all that shit we discussed above, if the number of checks is small all of a sudden they go, holy crap, it costs a lot of money to write these checks, we need to find someone out of house to do it for us. So, what ends up happening? The boomer stays on, because you need him or her to manage the outsourcing partner and the clerks are fired. Of course there is a bonus for the boomer for realizing all of the cost savings.

I have seen this many times over ... I am convinced this is what happens.

195   PermaRenter   2008 Nov 15, 12:13pm  

>> Peter P Says:
>> Anyway, let’s hope the police will get the monster soon.

Done.

There was no indication that Jing Hua Wu posed any danger when he walked into the offices of his Santa Clara employer on Friday, a few hours after he'd been fired. So there was no reason for three top company officials to refuse his request for a meeting.

But some time after Wu and the three executives went into a room to talk, police say, the 47-year-old engineer pulled a 9 mm handgun and shot all three dead.

Nineteen hours later, a Bay Area manhunt ended when police cars swooped into the parking lot of a shopping center at El Camino Real and Grant Road in Mountain View. Wu was unarmed and made no attempt to struggle, police said, when officers piled out of the cars at 10:45 a.m. Saturday and handcuffed him in front of the Home Consignment Center store.

The shootings caused "genuine fear in the community," said Santa Clara police chief Stephen Lodge at a news conference Saturday afternoon, adding that it was a relief "to be able to take him into custody."

VICTIMS IDENTIFIED

Authorities said Wu would be booked on suspicion of three counts of homicide for the Friday afternoon slayings at SiPort Inc., a small semiconductor firm at 3255 Scott Boulevard.

Police identified the victims as Marilyn Lewis, 67 of San Jose, who was the company's head of human resources; Brian Pugh, 47 of Los Altos, who was vice president for operations, and Sid Agrawal, 56 of Fremont, who was the company's co-founder and chief executive officer.

196   PermaRenter   2008 Nov 15, 1:37pm  

allow me to explain what it is like to work in a "fabless semiconductor company"; or, why i would go postal and kill everyone

so this douchebag decides to kill his boss and coworkers on a friday afternoon. i can’t pretend to know exactly why this guy offed some other guys but given that i, too, have worked in a four years old and funded fabless semiconductor design startup maybe our experiences are in parallel.

fabless is codeword for lame

in silicon valley there are literally thousands upon thousands of these fabless shops. companies, usually led by an engineer scion from a bigger firm or academic background, that begs for cash from ventures and angels with a pitch to develop either a cheaper copy of an existing integrated circuit design or an amalgamation of multiple designs onto systems-on-a-chip (SoC). the one i worked at had the pipe dream of trying to integrate wifi and wimax standards onto a dual-die SoC while siport is trying to develop a mp3/media radio transmission chip for mobile platforms. the shops are called fabless because they don’t actually own a fab — a foundry to physically produce chips — but rather either sell the designs to a bigger corporation, back then to freescale, or to original equipment manufacturers (OEM) in asia who makes all the electronic shit that you so love.

fabless is codeword for hardcore

startup ceos with a chip on their shoulder or too big of an ego might even try package up their designs and hire a foundry, such as tsmc, to make the chips for sale. the risk for this is crazy, especially considering the extensive time and staff the sales process requires. although if your business were 85% all one company, such as portalplayer with apple, then by all means you’re going to be flush with cash — up to until apple decides to make everything inhouse, then you’re just fucked.

but even then, with faster development, no need for chip production investment, and potentially lucrative market of oem electronics in a global market, the risks are pretty good in comparison to the upside and these shops run all across silicon valley. hell, it’s why we’re called silicon valley. hell, if your company flops there’s bound to another one down the street that’s hiring.

make no mistake, though, when people describe startups before the go-go days of dotcoms (late 80’s and 90’s you punk kids) these chip companies were the shit that they were talking about. people sleeping under their desks. 90 hour workweeks. you eat, sleep, and die by your company.

fabless is codeword for slavery

that then lies the problem. everyone wants in on this game. if you just listen carefully at every chinese restaurant — or indian restaurant — someone is talking loudly about their work in this field. sometimes you might get to evesdrop on their cell phone conversation with their chinese or taiwanese office complaining about the inability to get some shit done.

this crazy competition to produce the designs as fast possible in order to garner sales puts an incredible amount of stress. to who? why, to a nonexistent labor pool. you see, the problem ends up being that there’s just simply not enough labor to go around. the talented electronic engineering or computer science kids homegrown via american education gets snapped up by big names such as intel even before they graduate. the second and third tier engineers lack the experience, you need people with master degrees sprinkled with phds, to actually research and develop an entire chip by themselves. so what’s one to do? import. h1bs.

but without big money the quality of labor you bring in from china or india are still not top-notch. most likely they’re the second-string engineers unable to pick up jobs in the hottest market in the world. but hey, at least they’re cheap. and the cool thing is that once they’re brought here you can basically put them into “corporate housing” which basically amounts to slum apartments that you rent in milpitas or fremont. and since the company has sponsored them, their ability to stay in the usa is completely in your hands.

fabless is codeword for douchebag

that then brings me to this point. why would this douchebag kill his boss? failure. either the entire project is fucked or ran out of money. shit like that happens in the valley. and from there things just go down here.

those with the circumstance to be able to pick up another job will just move on. for them, the lull in between is meaningless. but those that can’t, those without money and no freedom earned, suffered through the insane production schedules. those people will snap. people in their late forties who have immigrated to this country in hopes of making it big will outright fucking snap. and every instance in where they were slighted will quickly turn into a means of justification. the anger you have in thinking you got screwed over will manifest deep in your hearts.

and it’s sad.

i have no snark for the kicker.

http://nevercapitalize.com/post/59796572/allow-me-to-explain-what-it-is-like-to-work-in-a

197   Malcolm   2008 Nov 15, 11:45pm  

TOB, I don't even know what my opinion on that is. I'm so numb to this catastrophe that even crazy ideas seem like they should be listened to.

I do find it ironic that social security, which my understanding is only returns 1%, now outperformed other private retirement plans. Many of these have a negative return.

198   Malcolm   2008 Nov 15, 11:52pm  

PermaRenter, I just had a chance to read your FAB commentary. It opened a window to a world I know nothing about. I could relate to companies owned and run by scientists who think they're business people but the rest of it reads like a depressing story of servitude. That industry sounds like it sucks big time.

199   PermaRenter   2008 Nov 16, 12:58am  

Malocm,

The fabless story is written by Alaska Miller. Contact him at
alaska.miller@gmail.com
http://alaskamiller.com/

Best regards,
PermaRenter

200   justme   2008 Nov 16, 1:48am  

Malcolm,

>>I could relate to companies owned and run by scientists who think they’re business people

What about the companies run by "business people" who think they are business people? The kind that thinks Activity Based Costing is da sh*t? I'm serious, this is even bigger a problem.

201   justme   2008 Nov 16, 2:03am  

PermaRenter,

I don't agree with you on your blanket assessment of fabless semiconductor companies. Almost any semiconductor company these days is fabless. Look at Broadcom, Marvell, Atheros and Cavium for some fairly recent successful examples.

Xilinx, anyone? Altera? Sandisk? Or Qualcomm? Almost any semiconductor company started since 1990 has been fabless. There are good economic reason for this to be the case.

That being said, I think you are talking about a certain type of fabless company started by some me-too-Joe-wanna-be-CEO that has neither the business nor technical acumen required to build a success. These kind of companies have been the walking dead, and they hire a lot of inexperienced H1B and less-than-stellar engineers because that is all they can get. They try to make up for it by working 24*7, by sometimes even that is not enough. I'm distinctly not talking about any company in particular here, but that class exists, and there is quite a few of them.

Another observation: If some big time CEO complains endlessly about a shortage of engineers and lobbies for increased H1B quotas, it is often a sign that
the company or the CEO (or both) are crap and is to be avoided.

202   justme   2008 Nov 16, 2:10am  

PermaRenter,

Even with the link at the end, that Cut-Paste job of yours was so long that I mistook the writing for being yours. See what happens when you cut/paste as much as you do, with no introduction. Please write some intro or attribution on top when you are going to paste ANY material.

Correction: My comment is hereby directed to Alaska Miller, not PermaRenter.

203   Malcolm   2008 Nov 16, 2:18am  

Justme, point taken. I've been around long enough to have heard all the buzzwords that everyone in my field then jumps on.
You know them all as well:
6 sigma
activity based costing
JIT (I am a big believer of this one, and it is not just having no invenotry)
Crossing the Chasm

All that shit that all of it has some merit in the right application, but these clowns jump all over the latest and greatest and sacrafice just using common sense. This old buddy system where like I've said before, no one has the guts to point across the conference table as a way of reducing waste in my opinion is the underlying factor. I further agree with you because, like in my field of the study of entrepreneurship a vast number, and I mean vast, of successful entrepreneurs are tough street smart people with a real caring of creating something of value and helping society.

204   SP   2008 Nov 16, 2:46am  

permarenter's excerpt:
fabless shops. companies, usually led by an engineer scion from a bigger firm or academic background, that begs for cash from ventures and angels with a pitch to develop either a cheaper copy of an existing integrated circuit design or an amalgamation of multiple designs onto systems-on-a-chip (SoC).

That is TOO KIND a way to put it. In most cases, the founder(s) are engineers who start the basic work on a parent company's dime (Cisco, Intel, Cadence, Apple, etc.). If the prospect looks like it is commercially viable, they withhold the information and STEAL it from the parent company by walking out and "starting up" a fabless shop with the help of a VC. Hire a few slaves to do the fabless grunt work in an old, damp office building on Scott or Kifer. Once engineering is done, they co-opt a senior sales-exec from the big-co, who helps the startup poach from the big company's customer list.

Their exit strategy is then to sell the company for fat-stacks to one of these same big companies, and "work" there for a couple more years before doing the same thing again.

I could post a dozen names from my own linkedIn list that are repeat offenders in this space, but the risk of a libel suit is too high. These bastards are a cut-throat bunch.

205   PermaRenter   2008 Nov 16, 2:58am  

So why people join these kind of sweat shop startups ... they will not get admission to stable big companies? On top of this I think they take huge debt for homebuying. For example this lead test engineer owned a home.
The mix of startup and debt stress becomes too much to handle I guess .... unfortunate!

206   blackswan   2008 Nov 16, 3:38am  

@SP - LOL. Did you work at Greenfield Networks?

207   Malcolm   2008 Nov 16, 3:43am  

Two words....stock options.

208   PermaRenter   2008 Nov 16, 3:44am  

Cisco Completes Acquisition of Greenfield Networks
SAN JOSE, Calif., December 7, 2006 - Cisco (NASDAQ: CSCO) - Cisco Systems® today announced it has completed the acquisition of privately-held Greenfield Networks Inc. of Sunnyvale, California. Greenfield Networks provides integrated circuits, hardware and software optimized for Ethernet packet processing that enables next-generation Metro Ethernet services

Greenfield has a proven track record in developing and deploying semiconductors for the Metro Ethernet market. This technology is highly complementary to Cisco's existing line of Metro Ethernet products.

With the close of the transaction, the Greenfield team and product portfolio are now integrated into Cisco's Ethernet and Wireless Technology Group (EWTG) led by senior vice president, Kathy Hill.

209   Malcolm   2008 Nov 16, 3:50am  

Qualcomm's success has really done a disservice to how tech is financed. I know I'll catch flack, and those who know me know that I never mean to be disrespectful of anyone but tech guys like engineers and writers are so mesmerized by 'get super rich through a short amount of hard work' schemes that they only need one Qualcomm success story and then the next thing you know you have incredibly skilled people working for $50,000 a year and a pile of stock options that way more often than not have more value as toilet paper rather than as financial instruments.

210   PermaRenter   2008 Nov 16, 3:54am  

>> justme, Permarenter is hyperlink challenged.

That is correct.

211   PermaRenter   2008 Nov 16, 3:55am  

>> a year and a pile of stock options that way more often than not have more value as toilet paper rather than as financial instruments.

I have had my share of toilet paper with Atoga Systems .....

212   Malcolm   2008 Nov 16, 4:01am  

At Metallic Power I received a promotion and a bonus, which was stock options. I'm like, "Wow, thanks a lot you guys." :)

In all fairness, at least I saw the writing on the wall. I actually saw some people write checks to exercise them. Talk about getting kicked in the nuts twice. They opened their legs to take it a second time.

213   Peter P   2008 Nov 16, 4:05am  

wow three people die and one gets put away for life…

Hopefully, the DA will push for the death penalty.

214   justme   2008 Nov 16, 4:34am  

Malcolm,

I think we're on the same page. There are clowns both in business and in science+engineering.

On the business side of things, I am especially weary of those that use the expression "on the business side of things".

:-)

215   justme   2008 Nov 16, 4:37am  

>> justme, Permarenter is hyperlink challenged.

>That is correct.

But perhaps we can start the post with a simple attribution, even if the hyperlink does not quite make it?

216   PermaRenter   2008 Nov 16, 4:38am  

I call "stock options" as "options stock". You exercise your option to stock them at your bathroom (and write the check) :-)

217   justme   2008 Nov 16, 4:42am  

Malcolm,

Also good points about the various fads that are out there. Allow me some translation:

6-sigma quality: We, the manufacturing people, are the most important ones in the company.

Market Driven Quality: Hey, what about us in the marketing department, WE are the important ones. Everyone knows that.

Activities Based Costing: Hey, what about us in finance and data-mining? We are important, too, and we will save you BIG money.

....and so on and so forth. Scott Adams, if you ever read this, you have my permission to use.

218   justme   2008 Nov 16, 4:45am  

SP,

Good points, but many times startups also happen because certain employees absolutely cannot get Big Company X to support their idea for a new product.

No swindle involved, necessarily.

219   justme   2008 Nov 16, 5:39am  

TOB,

>>justme, you forgot the lawyers! dont ferget about them!

Do they have a trade-marked program? Or does Lawsuit-driven Quality (TM) just come naturally? :-)

220   Malcolm   2008 Nov 16, 6:45am  

TOB, right on. Wow, you guys have a good memory. I remember something along those lines. I had started at the company in 2000. I vaguely remember something along the lines of "If you do it this way you have to recognize the gains right away. If you do it this other way you recognize the gains at the time you exercise or sell them." My memory is a little fuzzy on that but I think you are talking about that same tax ramification. It might also explain how they did all of a sudden start treating them like Monopoly money.

221   Malcolm   2008 Nov 16, 6:47am  

Judicial Activisim? The thought that sticking it to the man somehow makes the world a better place.

222   Malcolm   2008 Nov 16, 6:48am  

Again, in the right circumstances, a perfectly valid point of view.

223   justme   2008 Nov 16, 6:50am  

Malcolm,

Perhaps you are thinking about what is known as an "83(b) election" in tax law parlance.

http://financial-dictionary.thefreedictionary.com/Section+83(b)+Election

224   Malcolm   2008 Nov 16, 7:00am  

Justme, that's the one.

TOB, ain't that the truth. I have very specific accurate memories. I'm amazed at the detail of things I remember from so long ago. I remember incredible detail having to deal with these types of prick-fucks that we all seem to have had to endure in our careers. Some things I would rather just forget but I can't.

225   Malcolm   2008 Nov 16, 7:02am  

Funny, on the History Channel I'm watching some guy who can draw a city just from seeing it from a good vantage point for a few minutes. Very interesting.

226   Malcolm   2008 Nov 16, 7:04am  

He is a sevant. He is technically autistic.

227   OO   2008 Nov 16, 8:43am  

The Indian CEO at SiPort fired the gunman.

That was a bit too mean, while I am not going to say he deserves what he got, but he obviously didn't have very high EQ. As a small startup, you never fire anyone even if that person has a poor performance. Especially when the economy is teetering on depression, if you are not providing good reference for your employee, he will most likely have a very hard time finding the next job, and on top of this, he is not eligible for unemployment benefits.

Everyone I know who has to "fire" a employee always ends up convincing him to "resign" within a couple of weeks, and promised to provide good job reference, hey no skin off our back.

Well, as a grown up you will just have to bear the consequence of cornering people. If you are mean, you are just subjecting yourself to a higher risk of getting screwed over some time down the road, it just seems the retribution of the Siport CEO is a bit too harsh.

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