Saturday, February 27, 2010

What happens when countries pile up debt?

Business Insider interviews Ken Rogoff:  Growth slows way down; and the yuan replaces the dollar.
  • When countries hit gross government debt as 90-100% of GDP, problems are bound to arise.
  • If countries go too long with stimulus it can leave them in a debt trap and with prolonged slow growth.
  • The U.S. has been in 'default' before -- when it went off the gold standard -- and there is no reason why it won't have problems again.
  • Banking crises inevitably lead to sovereign debt crises as government

Friday, February 26, 2010

We can learn a lot from our mistakes, ....

But only if we let states make them.  Some of our most valuable experiments ended in failure:
Expanding public programs. In 1994, Tennessee started a massive Medicaid expansion (eventually covering 500,000 additional residents). A decade later, the state abandoned the experiment after costs more than tripled: from $2.5 billion in 1995 to $8 billion in 2004, consuming one-third of the state budget. When the experiment unraveled in 2005, 170,000 enrollees were dropped.

Imposing heavy-handed insurance regulations. Starting in April 1993, New York State imposed two new regulations, intended to make insurance more affordable for older and sicker residents. Instead, community rating (which forces insurers to charge one price regardless of age or health status) and guaranteed issue (which forces them to offer policies to all applicants) nearly obliterated the market for individual insurance. The regulations drove up prices for young and healthy applicants, pushing them out. Today New York’s individual insurance market is 4% of its size in 1994.

Creating a new “public option.” In 2003, Maine launched an ambitious plan to cover all its uninsured, in part by creating a government-run, “public option” insurance plan with taxpayer-subsidized premiums. An expensive train wreck, less than 10,000 residents have enrolled since it started in 2005 – at a cost of $155 million. Today, enrollment is capped, due to budget constraints.

Barbies, Printer Cartridges, and Razor Blades

In the last example of indirect price discrimination, P&G has announced the release of its next generation Gillette Fusion razor. The suggested price for a handle and single shaving head will be $10.99. A 4-pack of replacement blades? $16.99.

Thursday, February 25, 2010

All you need to know about the health care summit

liveblogging from CATO
There are two ways to approach reducing the use of high-cost, low-benefit procedures. You can have the government tell people what they can and cannot have. Or you can have individuals pay for a larger fraction of the medical procedures that they consume. It really comes down to those choices.

Advocating either one of those is political suicide, and talking about anything else is a waste of time. The Democrats will not advocate government rationing, and the Republicans will not advocate scrapping most of our current system of third-party payment in medicine. Instead, the summit, like the entire "health reform debate" this year, will be a waste of time.

Tuesday, February 23, 2010

More bad news...

from the IMF:
The IMF forecast in November that gross U.S. borrowings will amount to the equivalent of 99.5 percent of annual economic output in 2011. The U.K.’s will reach 94.1 percent and Japan’s will spiral to 204.3 percent.
Investors will eventually demand higher interest rates to lend to countries around the world that have accumulated debt, including the U.S.

"No one washes a rental car"

Clear thinkers like George Will are hard to find.  In this ten minute clip he takes on President Obama's "dependency agenda."

What will the end game look like?

Ferguson claims that it will take a simple, but dramatic event to shake the belief in the American Empire.

Foreign Affairs: But one day, a seemingly random piece of bad news---perhaps a negative report by a rating agency---will make the headlines during an otherwise quiet news cycle. Suddenly, it will be not just a few policy wonks who worry about the sustainability of U.S. fiscal policy but also the public at large, not to mention investors abroad. It is this shift that is crucial: a complex adaptive system is in big trouble when its component parts lose faith in its viability.

HT:  Business Insider

Doomsday cycle

Bailouts create incentives for others to take excessive risk (moral hazard).  Then when the economy slows, even more people require bailouts. We have to recognize--and then stop--this cycle.
The real danger is that as this cycle continues, the scale of the problem is getting bigger. If each cycle requires greater and greater public intervention, we will surely eventually collapse.
HT:  Merle Hazard

Monday, February 22, 2010

How does Germany control health care spending?

By contracting with office-based doctors (gate keepers?) , by using DRGs [diagnosis-related groups] to reimburse for hospital care, and by encouraging everyone to avoid unnecessary expenditures.
As an example, I will describe the incentives we use to limit drug expenditures. First, we introduced small copayments for prescriptions. These copayments, which vary based on each drug’s cost, discourage patients from using expensive medications that provide no real advantage over less expensive alternatives.
We then introduced a reference price system based on therapeutic classes—groups of similar drugs used for the same condition. Under this system, we reimburse for all drugs in a therapeutic class at the same price (for more details on how this is done, see sidebar “How Germany establishes reference prices,”). Our goal was to give pharmaceutical companies an incentive to concentrate on innovation and not simply to produce follow-on medications. Reference pricing does not prevent a pharmaceutical company from demanding more money for a given drug, nor does it prevent a doctor from prescribing that drug. However, the doctor would have to explain to patients why that drug is necessary, and the patients would have to be willing to pay an added amount above the normal copayment. The pharmacists filling the prescriptions would also question the patients to make sure that they understood that less expensive alternatives were available. Because generic substitution is permitted in Germany, we have yet another check in place to ensure that expensive drugs are used only when appropriate. Last but not least, we removed most over-the-counter drugs from the benefits package. Patients who buy drugs without a prescription have to pay for them.

Stossel & forced unionization of day care providers

"The Oracle" speaks

Lucky or Good?

In a paper presented at last year’s Academy of Management meetings, Andy Henderson of the University of Texas, along with Michael Raynor and Mumtaz Ahmed of Deloitte Consulting, investigate companies who have persistently high performance (press release related to the paper here). They tracked the returns of over 20,000 companies from 1965-2005. They took a closer look at 865 firms who had at least 11 years of data, and after controlling for a number of factors outside the direct control of management (industry, time trends, firm size, etc.), they found that 45 ranked in the top decile of annual performance five or more times. Sounds like a good set of companies for another type of Good to Great book.

But, here’s the kicker (and what makes this a pretty cool paper). The authors wondered what we might have seen in the data if success were simply random. After running a bunch of simulations in which success of hypothetical companies was randomly determined, they found that about 37 firms would be expected to hit the top decile of annual performance five or more times. So, it’s quite possible that the title of a book examining these companies should be Lucky rather than Good to Great.

This is a pretty big issue for research that claims to isolate the determinants of sustained superior performance. We may be studying companies who just got lucky rather than companies whose managers have figured out some better way to compete.

See the Deloitte site on the overall persistence of profit project, from which the paper came.

Sunday, February 21, 2010

Excuse Innovation

I do not know which I like better, that this 'product' facilitates moral hazard or that it is 'promoted' by a complementary product, beer.

Friday, February 19, 2010

Just How Valuable is Your Social Network to You?

The technology of social network sites keeps evolving. One feature of my new GPS enabled phone is for me to allow my friends (or anyone) to know my coordinates. This seemed a little creepy to me (but I suspect Elin would have liked to have installed it on Tiger's phone). But you don't have to be so sophisticated. All you have to do is tweet your location. The downside is that recipients know you are not at home. And a new website continuously aggregates this information into an aptly named:

Hat tip: Jane H.

Name Your Price - Video Games

How much would you pay for a video game if you could pay whatever you wanted? Here is a nice discussion of just such an experiment. This histogram tells the main story:

Note the peaks at $1, $5, $10, $15, and $20. These data bring to mind results from experiments in play the dictator game.

Hat tip: Alex Ward

Thursday, February 18, 2010

States you should probably leave, if you can

because they have not funded their state pensions and residents will eventually have to pay.

 New Jersey 
 Rhode Island 
 South Carolina 
 West Virginia 

Who's the worst?

 Universities ranked by endowment performance.  (Vanderbilt is down only 18.9%). 

1) Harvard, down 30% and $10.9 billion
2) Yale, down 29% and $6.5 billion
3) Duke, down 28% and $1.7 billion
4) Brown, down 27% and $730 million
5) Syracuse, down 33% and $327 million
6) University of Minnesota, down 27% and $312 million
7) Cornell, down 26% and $1.4 billion
8) University of Southern California, down 26% and $918 million
9) California Institute of Technology, down 26% and $483 million
10) Grinnell, down 27% and $396 million
11) Yeshiva, down  27% and $365 million
12) Southern Methodist, down 26% and $370 million
13) Georgia Tech Foundation, down 26% and $329 million
14) Baylor School of Medicine, down 33% and $360 million
15) University of Illinois, down 26% and $296 million
16) Pomona, down 26% and $460 million
17) Carnegie Mellon, down 29% and $313 million
18) University of Delaware, down 25% and $332 million
19) Northwestern, down 25% and $1.8 billion
20) Rockefeller University, down 24% and $491 million

Wednesday, February 17, 2010

Chicago Cubs find a new way to price discriminate

By offering advance sale single-game tickets at a premium:
The Cubs say they believe they are the first team in Major League Baseball to offer a pre-sale of single game tickets to anyone willing to pay an additional 20 percent over face value.

Tuesday, February 16, 2010

Should you bet on a yuan appreciation?

The surge in Chinese exports and the increase in Chinese interest rates suggests so:
The last really big currency realignment was a series of devaluations that took the Yuan down from a high of 1.50 to the dollar in 1980. By the mid nineties it had depreciated by 84%. The goal was to make exports more competitive. The Chinese succeeded beyond their wildest dreams. There is absolutely no way that the fixed rate regime can continue.
There are only two possible outcomes. An artificially low Yuan has to eventually cause the country's inflation rate to explode. Or a global economic recovery causes Chinese exports to balloon to politically intolerable levels. Either case forces a major revaluation. Of course timing is everything. It's tough to know how many sticks it takes to break a camel's back. Talk to senior officials at the People's Bank of China, and they'll tell you they still need a weak currency to develop their impoverished economy.
Per capita income is still at only $5,000, a tenth of that of the US. But that is up a lot from $100 in 1978. Talk to senior US Treasury officials, and they'll tell you they are amazed that the Chinese peg has lasted this long. How many exports will it take to break it? $1.5 trillion, $2 trillion, $2.5 trillion? It's anyone's guess. One thing is certain. A free floating Yuan would be at least 50% higher than it is today, and possibly 100%. In fact, the desire to prevent foreign hedge funds from making a killing in the market is a not a small element in Beijing's thinking.

Monday, February 15, 2010

Long Bets

Do you think that a portfolio of funds of hedge funds would outperform the S&P 500 over a ten-year period? Willing to put any money on that? Protégé Partners, LLC is. They have wagered $1,000,000 at Long Bets; taking the other side of the bet is none other than Warren Buffet himself.

Long Bets is a wagering site sponsored by the Long Now Foundation, which was set up “to creatively foster long-term thinking and responsibility in the framework of the next 10,000 years.” Pretty interesting sites.

Saturday, February 13, 2010

Has all the air gone out of the housing bubble?

Ask the man who spotted the last one:
"If you look at the trend in rents to see where housing prices are headed, you're looking at the right measure," says Yale economist Robert Shiller.
In recent reports, Deutsche Bank demonstrates how steady or even falling rents have pulled down housing prices, to the point where in many markets it costs about the same amount to own as to lease. That's a golden mean that America hasn't seen in almost a decade. The DB research also offers convincing evidence that the wrenching adjustment in housing prices is finished for much of the nation, with a bit more pain to come in selected areas.

Friday, February 12, 2010

Pot Calls Kettle Black

The archbishop of Canterbury was the "headliner" at three-day conference called “Building an Ethical Economy,” sponsored by Trinity Church within a stone's throw of Wall Street. One of the Most Rev. Rowan D. Williams' quotes from the NY Times caught my attention. First were references to his measuring wealth in one's meaningful relationships rather than in material goods. So far, so good. Then:

And he said he opposed what he called “the logic of some kinds of capitalist practice that leads to the invention of more and more recondite, metaphysical, unreal forms of wealth” — a reference to derivatives — that may look good on paper but “correspond to nothing.”

Excuse me, but what relationship is more recondite, metaphysical or unreal than the one the Church has invented between the mortal and the divine? Would he share the same conclusion about this relationship? Despite decades of intense study, this relationship remains largely a mystery to me and, I dare say, to most mortals. That said, derivatives obviously remain a mystery to the archbishop.

Thursday, February 11, 2010

Stossel is coming to Vanderbilt

At 8pm on March 30 in Langford auditorium, John Stossel will debate Ralph Nader on the "Future of Capitalism."
Nader and Stossel will trade salvos over the theme "Business or the Consumer First?" starting 8 p.m. at Vanderbilt's Langford Auditorium. They will find common ground on the topic of book promotion, though, at least long enough to sign their respective books at the Vanderbilt Bookstore that afternoon at 3:30 p.m.

How do we control healthcare costs?

Just say "no."
Governor Deval Patrick is seeking sweeping authority to review and reject rates charged by hospitals, physician groups, medical imaging centers, and insurers, in a broad new effort to make health care more affordable, particularly for smaller companies and their workers.

Wednesday, February 10, 2010

Don't throw me into that briar patch*

If China stopped buying US Treasuries, their currency would appreciate against the dollar, and Chinese exports would become more expensive which would lead to domestic unemployment in China.  It is not clear that China's domestic labor market could absorb this kind of shock, or that the people would view it as reneging on the Faustian bargain they have struck with their government:  full employment in exchange for a totalitarian regime. 

*Brer Rabbit outfoxed Brer Fox by begging  him not to throw him into the briar patch (from which he easily escapted).

Baseball Price Discrimination

The Sports Economist Blog reports that the Baltimore Orioles’ 2010 ticket prices will be higher for games against the Red Sox and Yankees relative to the prices for games against other teams (by the way, this is a pretty cool blog to read if you are interested in the application of economic principles to the world of sport).

Why the use of price discrimination practices like this aren’t more widespread in sports is puzzling.

Tuesday, February 9, 2010

Was Uncle Milton right about the EU?

Milton Friedman famously predicted that the European Union would not survive its first recession. His prediction seems to be growing more likely:
That is precisely what euro skeptics have said from the beginning -- that a common currency can't work in the long run without a common economic and financial policy. The member countries' governments ignored these objections, unready to give up a further aspect of their national sovereignty.

Now politicians are facing a difficult decision: Should they continue as they have, thus potentially undermining the euro's ability to function? Or should they yield a portion of their national sovereignty to Brussels?

The oracle speaks, and he is bearish

Monday, February 8, 2010

Before you buy a carbon offset, read this article

Even the left-leaning Harper's thinks that Cap and Trade looks like a con:
The market [for Carbon offsets] is, in essence, an elaborate shell game, a disappearing act that nicely serves the immediate intersts of the world's governments but fails to meet the challenges of our looming environmental crisis.

It’s Not the Incentives, Stupid?

One of the consistent themes on this blog is the power of incentives to motivate behavior. Well, here’s an article from Dan Ariely (behavioral economist and author of Predictably Irrational) in the most recent issue of Wired UK magazine discussing how monetary incentives might not increase the quality of activity, only the quantity. Ariely and a couple of co-authors conducted some experiments that had subjects completing tasks that required creativity, attention, memory and concentration. The subjects were split into three groups that were offered different levels of bonuses for doing well: a day’s pay, two weeks’ pay, and five months’ pay. It turns out that the first two groups performed about the same while the last group (the high bonus group) performed the worst.
If our tests mimic the real world, then massive bonuses clearly don't work. They may not only cost employers more but also discourage executives from working to the best of their abilities. The financial crisis, perhaps, didn't happen in spite of the bonuses, but because of them.

Sunday, February 7, 2010

Tax us, please!

If you ever wonder why the government keeps growing when most people want it to shrink, look no further than Tennessee's Medicaid program, "TennCare."  Tennessee is facing a budget short fall, and the usual reaction would be to cut back spending.  In fact, the Governor has proposed steep cuts in funding, which would cut revenue to the state's hospitals who provide services to TennCare patients. 

The state hospitals have come up with a clever alternate plan.  Instead of cutting back TennCare spending, they want to increase it, financed by a tax on the state's hospitals.

Because the Federal government matches spending (with $2 for every dollar spent on TennCare), the taxes paid by the hospitals would be more than offset with increased revenue coming to TennCare from the federal government:
Hospital representatives would also want guarantees that the tax would be used to maintain TennCare payments to hospitals.
"They would favor it if they could be sure that it would translate into a multiple of three times" as much money in federal aid, said Nashville Rep. Gary Odom, the House Democratic leader. 

Note also that the state tax solves the "free rider" problem among hospitals.

Saturday, February 6, 2010


...a plan that actually addresses our long term budget problem.
Released two days before the unusual back-and-forth session between Obama and the GOP, the bill sponsored by [Paul] Ryan and five other House members would seek to reduce the deficit and spur economic growth by cutting the tax rate on corporations, shifting future Medicare and Medicaid beneficiaries to private insurance plans, and both raising the retirement age gradually to 70 and reducing the growth of benefits to make Social Security solvent. Even Democrats have acknowledged that it is one of the few plans offered by a member of either party that would lower the long-term budget deficit.

Friday, February 5, 2010

How do I stop my housemates from stealing my food?

Don Marron has the answer:

Unintended Consequences - Bike Helments Edition

A recent paper by Christopher S. Carpenter and Mark F. Stehr finds that bicycle helmets do prevent injuries but they also prevent bike riding.
"Over 20 states have adopted laws requiring youths to wear a helmet when riding a bicycle. We confirm previous research indicating that these laws reduced fatalities and increased helmet use, but we also show that the laws significantly reduced youth bicycling. "
I rode my bike everywhere until I could drive or bum a ride off a friend. My kids - not so much. More is the pity.

Thursday, February 4, 2010

This has the same financing mechanism as a Ponzi scheme, ...

...but it is run by the Government.
A report from the Congressional Budget Office shows that for the first time in 25 years, Social Security is taking in less in taxes than it is spending on benefits.

Apple starts making its own chips

Lost in all the hoopla surrounding the introduction of the iPad, was the decision of Apple to make the A4 chip that powers it:

The iPad is a relatively high-end device, yet Apple believed it didn't need to look outside its own walls for a CPU, and thus could forgo paying any form of "Intel tax." By contrast, the iPhones and iPods tend to use a chip called ARM that Apple, like many other ARM customers, need to license.

Of course, Apple is a very big company and, especially for the sort of high-volume product it hopes the iPad to be, it can afford the sorts of up-front engineering expenses that would make smaller companies reel. But if it can afford to make an in-house chip good enough for the iPad in 2010, might it not also be able to make one good enough for the Macintosh in 2013? And if it can do so by then, why couldn't Hewlett-Packard ( HPQ - news - people ) and Dell also?

Wednesday, February 3, 2010

This doesn't seem close to me

Over at the Economist, David Boaz from CATO is debating an almost defenseless Harvard Professor. Here is Boaz:

In many ways, of course, Obama has just doubled down on George W. Bush's policies of bailouts, takeovers, expanded Fed powers and nationalisations. Some of the opposition to him reflects the public's sense that we've been piling up spending and debt for over a year now, so he is being punished for his predecessor's mistakes. But Bush or Obama, these policies take us in the wrong direction. After a crisis brought on by cheap money and distortionary subsidies, he is doing more of the same. In a recession he is adding debt, taxes and regulation to the burdens already felt by business.

Professor Elaine Kamarack seems to have the problem correct,

The biggest culprit in this lack of focus was, of course, health care. Because universal health care is the last stone in the social safety net edifice created by Franklin Roosevelt, it has been, for decades, an obsession of the Democratic Party's elite. Unfortunately for them, this obsession has never been shared by the public.

but I dont think "more trust" in government is the solution.

Decades of data from the American public show a severe and persistent lack of trust in the federal government. This lack of trust is an especially difficult problem for a Democratic president with an activist and progressive agenda.

Tuesday, February 2, 2010

Damning With Faint Praise

On the Daily Show, Austin Goolsbee repeats the claim that the administration will start cutting deficits soon and that it is not so bad compared to what Obama inherited from "W" (I paraphrase). Is this really who you want to compare yourself to? "W" holds the title of the US president who inflated the debt the most. But it looks like he will be surpassed in record time.

Bush's last year and Obama's first year included extraordinary measures to "rescue" and "stimulate" the economy. Sensible people disagree about the merits of these measures. But putting that aside, we can compare projections into the "out years" with Bush's non-recession year budget deficits of only around $500 billion. As with all recessions, the current one will eventually end. Previous ones ended within a couple of years. But the White House projects a $727 billion deficit in 2013 and $1,600 billion in 2023. These deficits looks more systemic than temporary stimulus.

Is it possible to be both a budget hawk and a Keynesian?

Right now, President Obama's budget explodes the deficit, using the rationale of Keynesian stimulus  (NY Times.)
In a federal budget filled with mind-boggling statistics, two numbers stand out as particularly stunning, for the way they may change American politics and American power.
The first is the projected deficit in the coming year, nearly 11 percent of the country’s entire economic output. That is not unprecedented: During the Civil War, World War I and World War II, the United States ran soaring deficits, but usually with the expectation that they would come back down once peace was restored and war spending abated.
But the second number, buried deeper in the budget’s projections, is the one that really commands attention: By President Obama’s own optimistic projections, American deficits will not return to what are widely considered sustainable levels over the next 10 years. In fact, in 2019 and 2020 — years after Mr. Obama has left the political scene, even if he serves two terms — they start rising again sharply, to more than 5 percent of gross domestic product. His budget draws a picture of a nation that like many American homeowners simply cannot get above water.

I am skeptical because the spending is loaded with patronage to public employee unions, and pays only lip service to "future" debt reduction.

If President Obama is to be believed, why not cut future spending now?  This would preserve short run stimulus, and show his critics that they are wrong to be suspicious.   Here is my proposal: build in an automatic increase in the eligibility age for Social Security and for Medicare (2 months/year beginning this year) until the deficit is brought into balance.

To be fair, President Obama has proposed a commission to make suggestions to reduce future deficits, but effective leadership seems to require something stronger.

Monday, February 1, 2010

How can we make money under the new financial regulations?

Find assets in lower valued uses, and move them to higher valued uses.  For example, in the 1970's banks figured out that eurodollars (dollar denominated deposits in Europe banks not subject to US regulation) could avoid US price ceilings on interest. 
 ... With rates held below their natural level, American savers ... looked abroad. As dollars accumulated outside America, the Euromarket, where lenders and borrowers were free to set rates between them, developed in London. ... The devisers of Regulation Q did not intend to boost the money-market fund industry or to prop up London as a global financial centre but that is the effect they had.
Similarly, Hedge funds and private equity funds wre both the unintended consequence of regulation:
Hedge funds owe their appeal to their ability to go short, and thus make money even in falling markets. That marks them out from mutual funds, which are not allowed to short. And private equity would find it much more difficult to function without the rule that allows interest to be tax-deductible. 
So what might be the conseuences of President Obama's proposed financial regulation?
The main impact will be on proprietary trading, the desks that attempt to profit from market movements with the bank’s own money. If more of these desks are shut down, the markets will become less liquid. That will mean wider spreads and higher dealing costs for other investors, though that may be a price worth paying for safer banks. It is more likely, however, that the prop traders will move to hedge funds. The big hedge funds will get bigger and will have more impact on the markets. The unregulated part of the finance sector will become more important systemically, something the authorities may regret when the next crisis comes along.

When does the short run become the long run?

When debt reaches 90% of GDP (via Greg Mankiw):
As government debt levels explode in the aftermath of the financial crisis, there is  growing uncertainty about how quickly to exit from today’s extraordinary fiscal stimulus. ... Unless this time is different – which so far has not been the case – yesterday’s financial crisis could easily morph into tomorrow’s government debt crisis.
In previous cycles, international banking crises have often led to a wave of sovereign defaults a few years later. ...
We do not anticipate outright defaults in the largest crisis-hit countries, ...But debt burdens are racing to thresholds of (roughly) 90 per cent of gross domestic product and above. That level has historically been associated with notably lower growth.
While the exact mechanism is not certain, we presume that at some point, interest rate premia react to unchecked deficits, forcing governments to tighten fiscal policy. Higher taxes have an especially deleterious effect on growth. We suspect that growth also slows as governments turn to financial repression to place debts at sub-market interest rates.

Bargaining for a New Car

Advice on how to buy your next new car from the TimesOnline in the UK:
So here’s what you should do. Research the car carefully on the internet and decide exactly what you want.

Determine the colour, the extras, everything. Then, call every dealer within, say, a 20-mile radius.

When they answer, tell them exactly the car that you want. Then inform them that you are calling all the dealers in the area and asking about the same car.

You are going to buy the car at 5pm from the dealership offering you the best deal. You will ring back soon and seek a price — the full price, with nothing at all left to be added on later.

The dealer may object that if he gives you a quote over the phone, the next dealer will just come in £50 lower. You simply tell him that, yes, this might indeed happen.

That is why, you explain, he has to give you the very lowest price he humanly can, so as to avoid anyone underbidding with a price the dealer would have been willing to accept.

When the witching hour arrives, you go to the dealer with the best offer, cheque in hand, and pick up your car. If there is any change in the terms, you go to the second-best showroom, although this shouldn’t be necessary.