Friday, April 18, 2014

Stuff!


The crap you own is worth a lot less than you think.

We are dealing with a death in the family, which is a common thing these days, with the older generation getting older and dying off.   Frankly, the next 20 years are going to be booming business for retirement communities, retirement homes, eldercare communities, nursing homes, and mortuaries.   Elder Law is a booming area to get into, as legions of kids are being forced to deal with their parent's issues, both pre- and postmortem.

When a person dies, unexpectedly, it can be a bit of a nightmare to clean up.   Not only do various bank accounts, bills, and the like have to be dealt with, as well as probating a will, but you also have to deal with very personal property like the underwear drawer, someone's cosmetics, medicines, and old box of band-aids.

And then there is the refrigerator full of food, and the pantry full of same.  And if there are pets.....   it gets messy.

But often, the household furniture and things have to be sold off or disposed of, in order to sell the home or vacate the apartment or whatever.   And this is where you realize that all the crap you accumulate in life, which cost you a lot of money, personally, is really worth nothing.   And you realize that you have far too much crap in your life.

Even someone who isn't a hoarder and lives in a fairly orderly and clean home can have closets full of crap that accumulates - and takes hours to clean out, sort through, and dispose of.

And we all have blind spots in this regard.   I have a box of wiring stuff - computer and stereo cables, wall-pack transformers, old cell phone chargers and junk like that. Others have other blind spots - like a closet filled with brand-new containers of zip-lock bags (who knows, you might run out!) or stuff like that.  

It is an alarming wake-up call that we clutter up our lives with crap.

And in many cases, like with the ziplock bags, we buy more and more stuff, failing to remember that we have an inventory of these things already.

When you own something, but it is packed away or filed away in a closet or attic or drawer - and you can't find it - well, it is like not really owning that thing at all.

So you spend money on, say, a package of batteries, and you use one, put the rest in a drawer somewhere, and forget about it, and the next time you need a battery, you go out and buy a new package, and the process repeats.   Pretty soon, you are a battery hoarder.

Given the price of this stuff - cumulatively - it pays to spend some time in your life organizing things.   And it doesn't take much to do this.  Designate one drawer a "battery drawer" or whatever, and be done with it - and remember that is what that drawer is for - and ONLY that.

Many people have a drawer in their kitchen that becomes a catch-all for whatever they put into it.  A crap drawer, I guess.  My parents had one, and it was filled with odd notes, old pens, batteries, dull scissors, and the like.  Crap.

And we all say the same thing, too.  "Don't throw that away, it's valuable!"  And we tell each other stories about how such-and-such a painting we have, or a plate, or a coin, or furniture, or whatever, is some valuable family heirloom.   And sad-sack-of-shit-shows like "Antiques Roadshow" (their slogan, "validating your hoarding since 1998!") tell the plebes what they want to hear - that their ugly clock "could fetch $5000 at auction" or some such bullshit.

For the most part, however, it isn't true.   Yea, once in a while, someone finds an original copy of the Declaration of Independence and Normal Lear will buy it for $1.2 million.   The rest of the time, though, it is mostly just junk.

It is hard to admit this to ourselves - that we are all mostly plebes and the squalid crap in our hovels isn't worth its weight in gold.   But that usually is the case.  My parents left me an antique shoe, and told me it was priceless.  Turns out on eBay, it fetched $239, which was more than it was worth to me - or any of my siblings.

The Material is Mortal Error and you can't take it with you.   It is better to use your money to live your life than to accumulate things, particularly "collectibles" and the like.   Objects, by themselves, have no real worth, unless they have a use to you or someone else.  Gold bugs have yet to figure this out, but it is being explained to them, even as we speak.

This experience has highlighted to me that I need to do some cleaning out of my own - closets and attics and other junk collection areas where "stuff" seems to multiply, dragging us down emotionally, a little bit at a time.

UPDATE:  We called an auction company to see if they could sell the contents of the house in an Estate sale.  The man was pretty frank:  "My minimum fee is $1200 and you have maybe, on a good day, $2000 worth of stuff here, maybe less.   You may end up owing me money when it is all said and done."

So off to goodwill it goes, once the cousins have picked over the remainder.

Such is the worth of the precious "stuff" you cling to.   Certainly not worth ruining your life over, or obsessing about.

And if you think that your crap is somehow worth more than that, think again.   Unless you are a multimillionaire or  something, chances are, your crap isn't worth crap.

Thursday, April 10, 2014

Lions and Tigers and Bears, Oh My!


Dorthy, all of your online accounts have been HACKED! 


The sad thing about the news media is that, well, you can't rely upon it for any news.  All they sell is sensationalism and click-bait, and "Stay tuned for...." teasers.

No real information is provided.   You are on your own.

And you are better off just not watching television or listening to the "news" and instead, researching a subject weeks or months later.

Want to know what happened to that missing Malaysian Jet?  Wait a few years - that is how long it took them to find a missing Air France jet - and another year to do the report.

In the interim, nothing the "news" has to offer is accurate or useful.

Yesterday, alarming news that all of your online accounts have been hacked by a "Heartbleed" virus or something.   "Don't go on the Internet!" we are told, until the problem is solved.

Well, once again, not exactly.

Turns out, it was an exploit (and I wrote about those before) discovered by some security experts.   It has been around for at least two years, and there is no documented incident of it being used by a hacker, ever, ever, EVER!

In fact, if a hacker found out about it, it was because of the press release.
So, we are told that this exploit puts all your accounts at risk.   Right?

Well, once again, not exactly.

Only a few online accounts might be affected and again there is no evidence that anyone has used this exploit yet.

They finally posted a list of affected accounts today:

Change these passwords now (they were patched)

  • Google, YouTube and Gmail
  • Facebook
  • Yahoo, Yahoo Mail, Tumblr, Flickr
  • OKCupid
  • Wikipedia

Don't worry about these (they don't use the affected software, or ran a different version)

  • Amazon
  • AOL and Mapquest
  • Bank of America
  • Capital One bank
  • Charles Schwab
  • Chase bank
  • Citibank
  • E*Trade
  • Fidelity
  • HSBC bank
  • LinkedIn
  • Microsoft, Hotmail and Outlook
  • PayPal
  • PNC bank
  • Scottrade
  • TD Ameritrade
  • Twitter
  • U.S. Bank
  • Wells Fargo

Don't change these passwords yet (still unclear, no response)

  • American Express
  • Apple, iCloud and iTunes

Hmmmm...... that means I have to change a password on....... Gmail.   That's it.   Since I don't use Facebook, AMEX, or Apple, it is not an issue.

It is a shame that the article listing the real deal is buried under a mountain of celebrity news bullshit, while the alarmist articles about how you are going to "lose everything!!!!" online, are prominent.

The news media is utter bullshit.

And sadly, the like boy who cried "Wolf!" we just don't believe anything they have to say anymore, even when it might be relevant and true.


The Difference Between Gross and Net

Evil Doctors are scamming Medicare!   Oh, wait, maybe not.


This stupid article from CNN (and the ignorant comments accompanying it) illustrate how idiotic most American are.   People don't understand the difference between "Gross Income" and "Net Income" - which is a pretty basic thing.

If you are an average plebe - or a pot-smoking hating liberal - you would read the article and say, "This is scandalous!  Doctors making $21 million a year off of Medicare!   We should put a stop to this!"

But, if you read the article carefully, that is not what it says.

"One ophthalmologist from West Palm Beach, Fla., collected nearly $21 million, while a cardiologist from Ocala, Fla., received $18 million in 2012. Seven doctors pulled in more than $10 million in payments, while nearly 4,000 are Medicare millionaires. 

For instance, the data doesn't reveal the conditions of the patients. Also, doctors don't always get to keep the entire payment since they may have to reimburse drug companies or other providers for part of the service.

This is one reason why oncologists and ophthalmologists rank so high, said Medicare officials. These doctors often use expensive drugs in their treatments. Medicare pays the doctor 106% of the cost of the drug. The physician pays the pharmaceutical company for the medication, but keeps the additional amount for himself."

Just because a Doctor bills Medicare for a million dollars does not mean he takes home a million bucks in cash.   In fact, he never does.

Like any other business, a Doctor's office has huge overhead.  There is the rent, utility bills, the equipment, the nurses, physician's assistants, other doctors, the clerical staff, and of course, malpractice insurance.   If you are lucky, you might take home half of what you earn, if that.

And then there is medicines.   As the article notes, the medicines are billed to medicare at 106% of cost.   The doctor makes a lousy 6% mark-up on the cost of medicines, which barely covers the overhead of stocking, inventorying, taxes, and the like.   And for some practices, such as oncology, the cost of medicines can dwarf all other costs, which again, would make the overall amount "paid" by Medicare seem artificially high.

In my Patent Practice, I have the same problem.   I have to pay fees to the Patent Office, often in the thousands of dollars, and in turn, bill my clients and then get reimbursed for them.  I do not "mark-up" these fees, and that is a real cost to me, as I have to advance fees, on some occasions, and sometimes I don't get paid back, or I have to float a loan for 30, 60 or 90 days - or more.   And in fact, lately, I have been requiring advances on fees just for that reason.

So, if you saw my "Gross Income" you'd say, "Gee, you are making a ton of money!"   But when you factor in that $50,000 a year gets paid to the Patent Office, and I am just a conduit for that money, well, it doesn't look so rosy.

And one reason I closed my downtown practice is that the City wanted me to pay a 4.5% "Gross Receipts Tax" on every dollar I collected.   Thus, I would have to pay $4.50 for a $100 fee that I merely pass on to the Patent Office.   Not only would I have to raise my rates by 4.5% to cover the added cost to my fees, but effectively double this to cover the overall cost of such taxes.   Now you can see why doctors "mark up" the cost of drugs by 6%.

The problem with this CNN article (and the accompanying comments) is that it perpetuates a lot of mythology and ignorance, which damages our country as a whole.

First, it demonizes doctors even more.   Politicians like to blather on about "bad doctors" and "bad teachers" when discussing medical or school reform - as if we were over-run by hoards of incompetents.   For some reason, no one ever talks about removing "bad politicians" even though there is plenty of evidence they dominate that profession.  In any discussion about medicine, we have to stop using faceless unseen doctors as a punching bag for all our aggressions and frustrations.

Yes, some Doctors make a lot of money.  Wake up.   That's the whole point of going through a grueling medical education and internship.   It is hard work, and you have to do very messy things like cut into people and not be squeamish.   And you have to be really, really smart - and our society should reward people who are really, really smart.   One more thing - you have to be willing to take the risk that people will die if you screw up.   It is not an easy job.   You try it sometime.

Second, it confuses the plebes about how businesses work.   Oftentimes, in CNN Money and other know-nothing "financial networks" they will blather on about how "revenues" for a company have doubled or whatnot.   This gets everyone fired up, until in the fine print, they note that "profits" are actually down by 50%.   Overall revenue - the gross income a company collects - is really irrelevant, compared to the profitability of the company.

And yea, a lot of smart people miss this, too. Volkswagen set out to become "the worlds largest automaker" - failing to learn from GM and Toyota (the world's largest automakers in the past) that selling a lot of cars does not mean you are making a lot of money.   In fact, you can lose money on every car you sell and end up bankrupt, as GM did, not that long ago.   BMW, on the other hand, sells a fraction of the cars GM does, but is the most profitable car company on the planet.

Gross sales (revenue) and market share are really meaningless, when compared to net profits.   Granted, market share has a place in making business decisions and evaluating a business.  If your market share keeps shrinking long enough, you may go out of business.   And if gross sales (revenue) is down, well, it may be indicative of problems with the product - and also reduce your profitability in the long run, as economies of scale disappear.

But to talk about gross revenues as being "profits" of a company or a doctor is as stupid as saying 2+2=5.   It is such a fundamental mistake - and yet the media loves to cloud the issue, by never clarifying whether they are talking about gross or net income, in any financial article.

Which is why it never pays to get your information from the media, particularly financial media.


* * * 

UPDATE:  This comment bears mention for another reason:

"Seven doctors pulled in more than $10 million in payments, while nearly 4,000 are Medicare millionaires"

CNN money and the media in general, confuse Income with Net Worth all the time as well.

If you have a Million dollars in assets (stocks, bonds, real estate) you are a Millionaire.   If you make a Million dollars a year, you may or may not be a Millionaire - it is just how much you make not what you are worth.   If you spend more than you make, you could make a Million bucks a year and be dead broke.

And again, this "Million dollars a year" is your Gross Income, not your take-home pay which could be less than half that - may far less.

But you see where CNN is going with this - the class warfare thing.   And they have coined a trendy name that they hope will get traction - "Medicare Millionaires".

Pretty sick stuff - to bash doctors and publish misleading information, all for the sake of sensationalism and ratings, ratings, ratings.

Gee, how much does the head of CNN make these days?   And I'll bet he never went to medical school.

How much is "Dr. Sanjay Gupta" paid by CNN to not be a Doctor anymore?

Wednesday, April 9, 2014

661-748-0241



If you get a phone call from 661-748-0241, just hang up.  It is likely a scam artist.


I got a weird one today, on my cell phone, from 661-748-0241.   The guy claims I "downloaded their marketing report online" and wanted to know if I wanted to use their marketing services.

I don't recall downloading any such information - and even if I did, how would they know?  And how would they get my CELL number?

I suspect the first part is a ruse to get around the DNC registry - claiming a pre-existing business relationship.

But, I politely told him that I am semi-retired and not interested in getting new clients.   And he thanked me and hung up.

I googled the phone number and discovered that it is a number used by fraudsters all the time:

What is phone number 661-748-0241?

Phone number 661-748-0241 is a default Skype telephone number alike 661-748-0240 that is used by Skype users who have not yet set up their accounts. The phone number 661-748-0241 will appear on outbound calls made by Skype users taking advantage of the services.

Warning! Criminals and scam artists use the phone number 661-748-0241 in order to orchestrate different types of scams.

Phishing attempts from (661) 748-0241

There have been many reports of criminals utilizing the default Skype telephone numbers, including 661-748-0241, to extract sensitive information from victims and perform various scams.
  • Phishing scams orchestrated by criminals using the default Skype phone numbers may include fake Microsoft scams, fake ISP scams, fake family member scams, etc.
  • Criminals will often call unsuspecting victims fraudulently claiming to be from Microsoft or the a representative from the internet service provider, etc. In some scams criminals will attempt to persuade a victim that their computer has been compromised by malware, etc. and will state that in order to fix their computers a remote connection must be made. For more information about this and similar scams please see our article about the AMMYY scam.
  • Criminals are noted to use personal information in phone calls.

Some marketing company - if they are using Skype to make calls and don't even have their own dedicated number!

So, add this number to your blocked numbers list, or just don't answer if you get a call from it.

This shit just never ends, does it?

Tuesday, April 8, 2014

Chick-fil-A IPO?

The Chick-fil-A founder says he wants to go back into the closet with his views on Gay Marriage.   Could this be a signal than an IPO is in the making?


Owning a company sounds like a swell deal, until you realize that you have all your money invested in one thing, and with one misstep, you can lose it all.  People might decide they no longer like your donuts, your square hamburgers, your roast beef sandwiches, or your whoppers, and a fast-food chain can go from "hot" to "not" in a real hurry.

If you doubt this, ask the folks at Krispy Kreme, Wendys, Arbys, or Burger King.   Their fortunes have waned as of recently, and the chains struggle to "turn around" their businesses.

The other problem with owning a big company like that is you can't spend the money.   Sure, Mr. Cathy, the founder of Chik-fil-A has like $7 Billion in net worth - but most of it is in the company he owns.  That goes south, and he is toast.   And if he wants to spend any of it, he has to use the profits or borrow against the value of the company.  Both ideas limit his spending options.  He has a lot of wealth on paper, but not in terms of spending power.

And as he gets older, well, he has to think about what happens when he dies.  Do the kids inherit the company?  What about the grandkids?   Suppose some of those kids don't want to own a slice of the company - and want to be bought out?   Their siblings may not be able to afford to do so.

So, maybe "going public" is a swell idea.   After all, those evangelical Christians and right-wing bigots have demonstrated that they will buy any half-assed investment idea, including gold, ammunition, and bunkers.  So right off the bat, you've got a captive investment audience.

Oh, but those pesky protesters - cutting into profits!  And all at a time when you want to expand into regions other than the redneck South.   You see, the company wants to open more stores in places like Chicago and New York, and in big cities, being bigoted and Closed-On-Sundays just isn't going to cut it.

Mr. Cathy also realizes that the younger kids (the so-called "Millennials") vote with their pocketbooks, and buying Redneck-Fil-A isn't seen as "cool" by those kids.

So, Mr. Cathy announces a new, Politics-Free Chick-Fil-A (no more side order of Hate!) and new exciting menu items in its place.  Maybe this will get those pesky Millennials (but not their icky Gay friends) to buy some waffle fries!

But of course, you have to wonder if people are really stupid enough to believe that just because someone stops talking about their beliefs, they still don't have them - and that they will use your money to advance social causes that may or not be aligned with your interests.

Frankly, I don't think it will work.  But then again, people are stupid.

But again, an IPO helps solve this problem.   In order to survive in the fast-food business, you have to grow-or-die.  And being closed Sunday and not serving markets like all the Blue States, just isn't going to work.  They have to expand into new markets, nationwide and overseas.  They will have to have airport franchises that will be open when people are traveling - and that includes Sundays.

(Speaking of which, can you imagine how our country would operate if every business had Mr. Cathy's mentality?  No gas on Sunday.  No airports open Sunday.  No emergency services on Sunday.  No hospitals on Sunday.  Hey - it's the Lord's commandment!  Unless you are Jewish - then it is Saturday, or Muslim, then it is Friday.   As George Carlin said, "God gets a 3-day weekend!   The Chik-Fil-A "Closed on Sunday" nonsense only works because other companies are open.   So in the Atlanta airport, they can close, and you can go somewhere else to eat.  But if everyone did this, it would be unworkable.  So, Mr. Cathy is being a bit selfish here, and relying on others to take up the slack.  Frankly, I don't think a Chick-Fil-A should be allowed in public franchise locations like an Airport or a Thruway rest stop, if they are not going to serve the public.   Award the franchise to someone else who will.  That should be a term of the lease agreement!)

As an "independent" company listed on the stock exchange, however, Chick-Fil-A can wash its hands (like Pilate?) of the controversy.  "We're an independent company!" they can say, and the founder's beliefs and message can be conveniently stripped away - leaving him with only, say, ten or twenty billion dollars in inflated IPO stock - maybe more.

History has shown than companies can recover from their bonehead founder's views.   Coors, for example, was boycotted when the Coors family was shown to funding a lot of anti-gay right-wing causes.   After a while, they realized that Gays drink a lot of lite beer in bars, and they were losing a lot of business.   Coors caved in, and pretty soon, they were the largest advertiser in many Gay publications.   They went from boycotted to favorite brand, nearly overnight.

Who knows?  The same could happen to Chik-Fil-Gay.  The drag queens in the video above seem to like it!

(By the way, that video would be a refreshing change from the stupid "Eat More Chikn" cow campaign.   I mean, fire your ad agency!  The cow thing just isn't funny anymore.)

Of course it goes without saying that all fast food is overpriced, not "fast" and horrifically bad for you.   Just don't eat fast food, period!





Nuthin' Can Be Done About It!

Cathy, Lisa, Jennifer, whatever, they are all scam artists - and nuthin' can be done about it.



We let crooks run rampant in this country, and when authorities are pressed for action, they throw up their hands and say, "Nothing can be done about it!   Watch out for yourself!"

"Lisa" from "Card Member Services" called again today.   She's been calling a lot lately - apparently the scam operation is up and running again.   

Of course, it is a scam.  And they telegraph this to you by violating the Do Not Call registry.  They are violating Federal law with every phone call.   Do you really think they have a real deal to lower your credit card interest rates?  Of course not.   Most times, they want a cash amount up-front (as much as $2000) to "lower your rates".   They keep this money and do nothing.   Other times, they just steal and sell your credit card information.

This website from the Minnesota Attorney General tries to be helpful, but really isn't.  She basically admits that, due to "technology" they cannot track down and prosecute these folks, and that the best you can do is file a useless complaint with the FCC or FTC (who will do nothing, because they largely can't do anything).

The refrain is the same.   Watch out for yourself, as we can't stop these criminals.   Don't fall for their scam, no matter how genuine it sounds.

And that is good advice for people who are young and astute and clever.

But for the poor and uninformed (and not very bright), what do they do?   They assume that people who sound like they are in positions of authority know what they are talking about.   And decent poor people, who work hard and try to get ahead, fall for these scams all the time.

Some folks get really upset about this (myself included).  And some try to contact the FTC, the FCC, their Congressman, or whatever - to no avail.   These people keep popping up like a bad penny, every six months.

They can spoof caller ID.  They use disposable or rented phone numbers or even stolen cell phones or calling cards.  The move from place to place, or are overseas.   They just can't be caught, it seems.  Or at the very least, we don't want to expend the effort to try - or to try to use technology to prevent them from calling.

In Canada, I am told, they have a telephone version of the SPAM filter.   Once a phone number is identified as a SPAM or fraud caller, using feedback from citizens, it can be quickly shut down and filtered, so that future calls do not go through.   For some reason, we can't do this in the United States.

Oh, right, that is "fettering legitimate businesses" with "unnecessary regulation."

Civilizations do not collapse from external forces, but rot from within.   Once a majority of the citizenry sees no point in supporting the status quo, all it takes is a small external force to topple the house of cards.

More and more people in the US don't see our country as worth saving.   Some of these folks are just crackpots, of course, who believe in conspiracy theories or weird Right- or Left-Wing philosophies.   We have to expect that, of course.

But the average Joe, who gets screwed by a PayDay loan, a title pawn loan, raked over by a credit card company, and then screwed by "Rachael from Card Services" - what about HIM?   He tried to play by the rules, worked hard, and made bad choices - choices that only 40 years ago would be illegal to offer in this country.    We stopped protecting Joe under the Rubrik of "Free  Enterprise" and "De-Regulation".

Hell, we even allow people to build houses in mudslide zones.   And when State Agencies try to map where mudslides are likely to occur, monied business interests shut them down so that that "Free Enterprise" and the right to bury people under 30 feet of mud is not impinged.  If you are thinking about buying a "mountaintop view" home in North Carolina, be aware that the State is intentionally preventing you from knowing whether your house will slide down that mountain - thanks to pressure from Real Estate Agents and land developers.

Some Democracy, eh?

Ahh... but nuthin' can be done about it.  Our hands are tied.   Special interests rule the day, and besides, only fools are scammed by these sort of folks, right?

Wrong.   More and more of us are retiring on our savings.   As we get older, we will be stewards of large sums of money that we will need to survive.  And as we lose our faculties, we will be rich, juicy targets for scam artists of one sort or another.

But, since the scam artists of all sorts contribute heavily to election campaigns, they can get "their man" elected, usually on a platform of "social issues" that appeal to his gerrymandered electorate.   The social issues are never resolved (by design, of course, you need a social issue like abortion to FESTER if you want to get elected).   But the "regulations" that hinder your donors are repealed - or modified to have the reverse effect as intended.

And every day our country devolves into "I've got mine, Jack, Fuck You!"

And one more citizen gets ripped off, and decides that voting doesn't matter and that our government isn't worth saving.

This is how civilization collapses.  Not the Taliban.   Not the Russians.   Rot from within.

Monday, April 7, 2014

Are Motorhomes Safe?




Crash statistics for Motorhomes are hard to come by.   Are these vehicles safe?


In my last posting, I analyzed why buying a motorhome on a 20-year note is not a very good idea.   Trailerable RVs are a lot cheaper, to be sure.   But many folks like the idea of the Motorhome for a number of reasons.

Some fantasize about what I call the "70 mph Cheese Sandwich" - that their spouse can make dinner while-you-drive and avoid stopping.   This is an expensive fantasy, and not a very safe one.  You are supposed to be seated and belted down while traveling in an RV.

Others like the idea that the kids and Mom and "spread out and relax" while driving, and thus enjoy the ride more.  And we see this, all the time, on the road, with kids romping on the bed in the back of an old Winnebago, while Mom and Dad sit up front.  The problem with this concept is that unbelted, your little ones become human missiles in the event of an accident.

And actually, everything becomes a missile in the event of an accident. 

If you collide with something in your car, six airbags will deploy, shoulder-harness safety-belts will lock in place (and actually tighten), and you and your family will be protected in a very carefully designed crash cage.

Now, granted, some Class-C motorhomes have airbags and seatbelts, and most Class-A motorhomes have at least seatbelts.  But few are crash-tested in the manner than cars are.

But the real problem with a motorhome collision is that all the junk inside the coach will fly forward in a crash - including cabinets, seats, appliances, contents of cabinet and drawers (including all the knives in your kitchen).  And unbelted children in the back will fly forward until they hit you in the back of the head.

This video shows more clearly how the insides of a motorhome can come apart in a crash.

The "box" part of the camper (particularly older ones) may be put together with just wooden sticks and a thin aluminum or fiberglass veneer.  Some better coaches have aluminum frames, but still are not designed with accidents in mind.  The cabinets and furniture are made of thin lauan plywood, usually stapled together.   None of this stuff is crash-worthy.

So, why isn't there more done to make motorhomes safe?   Well, to begin with, as a percentage of the overall vehicle fleet in America, they represent a pretty small part.   So in terms of accident statistics, they don't represent a big number.

And since they are heavy vehicles, usually a collision with a car or other small vehicle results in the smaller vehicle getting the brunt of it.

Raw data is hard to come by.   In this discussion group, it was noted that NHTSA has data on RV crashes, but trying to normalize this by miles driven is hard to do, as data on miles driven is apparently not collected.

RV accidents do occur, however, and we've seen a few on our journeys.  In many cases, the RV just disintegrates, particularly if it rolls over.  And we even have been to an RV junkyard, where crashed RVs were stored (and some repaired).   They do take a beating.   And we've met people who have lost spouses in RV accidents. 

In a "Class A" coach, you are often sitting right out in front, with little between you and what you hit, other than a windshield and a thin layer of fiberglass.  we met a man who lost his wife this way.  And that is a typical accident result, when a driver falls asleep at the wheel and drives off the road into a tree or a bridge abutment.

RV manufacturers, of course, would suggest that everyone remain seated while you are driving, and wear seatbelts.   However, much RV furniture is mounted sideways and provided with only lap belts.  Moreover, such furniture is not crash-tested for reliability.   And even assuming your children do not become human missiles, there is the issue of other items in the coach coming loose.

Frankly, this latter issue is one reason that when we sold our SUV we bought a mini-pickup truck instead.   Having heavy objects like a generator and the like, in the passenger compartment of your vehicle, is not safe if you get into an accident.  The pickup truck, in contrast, has a cargo area that is sealed off from the passenger compartment of the truck.  Frankly, I don't understand why SUV makers (and wagon makers) don't have some sort of cargo net (and a serious one, not some elastic dingus) separating the cargo from the people.  But I digress.....

But it should be pointed out that in some coaches, particularly class-A coaches, some furniture isn't even bolted down.  Many people have recliner chairs or folding tables in their coaches that just sit there, waiting to slam you in the back of the head, in the event of an accdient.

The author of the discussion group noted above, came to the following conclusions:

Summary:
The revised FARS analysis shows that a total of 212 individuals perished in motorhome accidents in the years 2000-2007 for an average of just over 26 fatalities per year.  This represents an average rate of fatality of 0.44 per 100 Million Vehicle Miles vs. 1.48 for all vehicles in the United States, or roughly one third the average rate of all motor vehicles.  (See Chart "Fatality Mileage Normalization Chart")

Observations:
1) The "Initial Harmful Event" which is the event deemed to have caused the crash, was overwhelmingly due to striking another vehicle in "your" roadway (45%).  That can mean a vehicle traveling the same direction of a divided highway, or a vehicle traveling in either direction of an undivided road.  Vehicle Roll-over, Striking a Guard Rail, and Striking a Tree, each represented approximately 9% of total crashes respectively. (See Chart "Initial Harmful Event")
2) The majority of fatalities occurred in the front seats of the motorhome, with 80% being either the driver or passenger.  Of the 26 rear compartment fatalities, only 2 persons died while using a restraint (seat belt).  No children using child safety seats died during the analysis period. (See Chart "Fatalities by Seating Position and Restraint Usage).
3) Alcohol did not appear to be a significant contributor to motorhome fatalities. (Less than 1% reported drinking as a factor)
4) The majority of fatalities occurred on rural interstates and/or major rural highways (54%). (See Chart "Road Type")
5) Trailers of any type were only reported in 26 of 212 fatalities during the study period.  Of those, only 3 were reported as towed vehicles, however that statistic was only added to the database in 2005 and is therefore statistically irrelevant. (See Chart "Fatality by Reported Trailer Use")

Conclusion:
It is difficult to come to any supportable conclusions about accident causation, however, what it is clear that motorhomes are statistically very safe relative to the overall vehicular population.  What limited fatal crashes do occur appear to be largely caused by striking other vehicles and fixed objects near the roadway and the resulting fatalities seem to most often occur in the front seat.  Given that there were only 26 reported deaths of individuals in the rear area and only 2 of those were belted, one can draw their own conclusion about the merits of using a belt.  This author draws solace in the fact that not a single child in a child safety seat perished during the study period.

This is an interesting report, as it does show that these vehicles are involved in fewer fatal accidents than ordinary cars.  However, I think this may be due to a number of factors:

1.  Age of drivers:  Most RV'ers are older and may tend to drive slower (unless they have Quebec tags, then all bets are off!).

2.  Weight of vehicles:  The heavier a vehicle is, the more likely it will deform whatever it is hitting, rather than suddenly decelerate.  You are going to be safer in a heavier vehicle, period.

3.  Type of driving:  Most RV driving is on Interstate roads, where the accident rate is low, even though speeds are high.  As the report notes, rural roads are where the fatalities occur, but there are far fewer of them than with cars.   For city collisions (intersection accidents) the speeds are low enough and the weight factor tilts in the RV's favor.

More modern Class-B and Class-C coaches are built to passenger vehicle safety standards.

Of course, a whole new generation of class-B and class-C motorhomes, such as built on the Mercedes Sprinter or Fiat chassis, are becoming very popular.  And these types of coaches have had crash tests and of course, airbags and the like.

Class-A coaches (which are built on a raw chassis) on the other hand, generally do not have airbags, and have not undergone any sort of crash safety testing.

From a design point of view, motorhomes are not intrinsically safer than a car or pickup truck, but in fact, probably less safe, due to the potential for flying debris in an accident.   However, statistically, they are safer on the road, due to the way they are driven and by who drives them - as well as their weight.   More modern Class-B and Class-C coaches are likely to be safer than Class-A motorhomes and older Class B's and C's.

And it goes without saying, that walking around in your motorhome, unbelted, while driving, is a very unsafe thing to do.   Not that I've never done, it, of course.

UPDATE:  A reader sends this picture of their Sprinter Class-C after a rollover incident involving another car.   It looks like other RV accidents we have seen.   As you can see, the "box" part of the motorhome basically disintegrates in a situation like this, while the cab portion remains relatively intact.   However, all the debris and objects inside the camper can intrude into the cab during such an accident.

While motorhome accidents may be rare, when they do occur, they can be serious.
 
The accident above occurred when a car (rolled over in the rear of the photo) struck the camper while attempting to pass.

Note that two of the biggest problems with RVs are overloading and under-inflation.  Until recently, motorhome manufacturers produced rigs that were very close to gross vehicle weight, even when unloaded.   Throw in two people and several hundred pounds of gear, and many were overloaded from the get-go.  Today, new regulations require that manufacturers provide realistic load carrying capacities and also prominently display these.

Tire under-inflation can lead to blowouts and in some cases, loss of control (particularly in marginal setups).   It goes without saying to check your tire pressures and know what pressure they should be inflated to.    Load carrying capacity of a tire drops off dramatically with tire pressure.  A tire that is 10 psi below rated pressure may lose 25-50% of its load carrying capacity.

Anatomy of a Bad Deal

Deals like this are how the middle-class gets into trouble.

I was reading the Good Sam catalog the other day, and saw this deal proffered for a low-end Class-C motorhome.   I nearly fell out of my seat.

To begin with, there was a mountain of fine print under the deal - that things like shipping, taxes, and the like were not included.  So getting the $49,995 price (let's just call it $50,000, OK?) was probably not in the cards.

But even assuming it was, well, with a 240 month loan (that's TWENTY YEARS, folks!) the purchaser would surely be upside-down for most of the loan.   And the vehicle would likely not outlast the loan.

This handy loan balance calculator tells the sorry tale of this bad deal:

YearBeginning BalanceInterestPaymentEnding Balance
1$45,041$2,217$3,564$43,694
243,6942,1483,56442,278
342,2782,0763,56440,790
440,7902,0003,56439,226
539,2261,9203,56437,582
637,5821,8363,56435,854
735,8541,7483,56434,038
834,0381,6553,56432,129
932,1291,5583,56430,123
1030,1231,4553,56428,014
1128,0141,3483,56425,798
1225,7981,2353,56423,469
1323,4691,1163,56421,020
1421,0209913,56418,447
1518,4478593,56415,742
1615,7427213,56412,899
1712,8995763,5649,911
189,9114233,5646,770
196,7702633,5643,470
203,470943,5640

As you can see, this is a classic case of the loan balance chasing depreciation, and the depreciation winning.  As I noted in my Upside Down Boat posting, motorized vehicles like this depreciate about 50% every five years.   After five years, this motorhome may be worth $25,000, whereas the loan balance is still over $37,000.   After ten years, the motorhome is worth maybe $12,500, whereas the loan balance is now more than double that.   After fifteen years, even, the motorhome is worth, on a good day, $7000 and the loan balance is still more than double that.   It is only in the last few years of the loan that the owner can possibly hope to sell the motorhome for more money (or at least as much as) is owed on the loan.

And in the interim, the options for the owner are not many.


This graph (click to enlarge) shows how much interest you will pay over time.

For a wealthier person, this is not an issue.  They just pay cash for the motorhome, or put more of a down payment on it, so that the loan balance is always ahead of depreciation.   But for the "monthly payment" mentality type of person, well, such deals are attractive, as they look only at the monthly payment, and nothing else.

How do I know that the coach will depreciate faster than the loan?   Well, I have owned a motorhome almost just like it.  The original owner paid $40,000 for it, and five years later, we paid $22,000, or about 50% of its purchase price, new.  It had only 25,000 miles on it, which is not atypical for a motorhome.

After five years of owning it, we sold it for $11,000, or about half what we paid for it.  And over time, it started to leak and delaminate.   The rubber roof needed work, and the bathroom needed a complete overhaul (which we did).   I had to replace the generator as well.  It cost a lot of money to maintain, and it was not very well made.   That is the dirty little secret of the RV business - these things are stapled together with sticks of wood, and they look nice when new, but quickly fall apart over time.

And 20 years?   For a typical motorhome, that is about the entire design life and then some.   By the ten year mark, many motorhomes are starting to look a little tired.  By the 15 year mark, they are pretty much worn out.   By 20?  They are ready for the junkyard.

Think about it for a second - would you buy a car on a 20-year note?   What makes you think a motorhome will outlast a car?   It simply won't.

Note also how much interest the buyer pays - over $25,000 over the life of the loan, or about 50% of the purchase price.

So, what happens to people who make deals like this?   Well, theoretically maybe one or two make out OK, provided they put the motorhome in a garage or barn when not in use (and not a barn with barn swallows pooping all over it or anything) and keep it in pristine condition and use it every year and enjoy it.   Even then, they are paying a lot of money (more than $3500!) to go on vacation every year.

Or, if they have money, they can sell it when they get bored with it - and pay the difference between the sale price and the loan from their savings.   Sadly, most people who bite on deals like this don't have $10,000 to $20,000 laying around to pay off upside-down loans.

And the more you actually use the RV, the worse it gets, in terms of depreciation.

For the rest of them, well, the motorhome sits in the side yard, degrading.  They lose interest in RVing, particularly after it breaks down.   Since they are "stuck" with the unit, they just let it sit in the yard for 20 years and pay off the loan.    Or their children sell it when they die.   And you might think this sounds absurd, but there are moldering RVs in people's backyards across America, simply because of deals like this.   My neighbor in Virginia had one - covered with algae and mildew and slowly sinking into the lawn - for over a decade.

Or you can let the unit be repossessed.  However, that still leaves you on the hook for the balance on the loan (minus what the unit sells for at auction).  Bankruptcy is the only way out of that mess. 

How do you avoid a deal like this?   Make a bigger down payment.   Go to a shorter loan term.   Buy a used unit and pay cash.  Buy a trailer and tow it with your SUV or truck.  Trailers are much cheaper to buy and depreciate more slowly than a motorized RV.

While loan companies may offer you deals like the one above, you don't have to take them.   And just because they offer you a deal like this, doesn't mean it is a good deal or that you can afford it.  The name of the game today is not to offer sound deals to people, but rather to set up deals that intentionally ruin folks over time.

Sadly, many people end up with worse deals than this, as they don't qualify for the 4.99% interest rate, because their credit is already bad - having bitten on bad deals in the past.   So they end up paying even more in interest and end up upside down in an even worse way.

It is sad to me that after the excesses of the 2000's - where banks loaned money to people knowing they could not pay it back, we are right back where we started.   And it seems no one has learned anything!

Sunday, April 6, 2014

Free Bandwidth?



When any commodity is "Free" or un-metered, demand will increase dramatically.


In the earlier days of the Internet, bandwidth was not metered very much.   You paid for an Internet connection and could upload and download pretty much as fast as your 56K modem would allow you to.

But since then, connection speeds have increased, and as a result, people are uploading and downloading more data.   Instead of simple ASCII pages, we send HTML.   And today, increasingly, audio and video.   We download entire movies.

WiFi illustrates the problem aptly.   People are so used to getting "free" WiFi, and increasingly, many businesses are reining it in.   Why?  Because it costs money to provide this "free" connection, and when more and more people start using more and more bandwidth, the system bogs down or crashes, which means more labor costs to reset routers or more material or service costs to provide more routers and higher bandwidth connections.

When something is free - or very low priced - an economy can develop that is based on this low-cost or free commodity.    In the 1960's, American car makers developed cars getting less than 10 miles per gallon.   No one cared, as gas was only 25 cents a gallon.   When gas prices doubled and gas stations ran out, only then did people panic.   Suddenly, a commodity that was dirt cheap became dear.

All energy was the same way back then.   Atomic energy would be "too cheap to meter" and cheap electricity encouraged people to do dumb things like heat their homes with resistive heating elements.   The "all electric home" was touted as the wave of the future - glass boxes with little or no insulation.   Cold?  Just turn up the thermostat!

All that came crashing down with the energy crises of the 1970's, of course.   And in terms of data, we are heading the same way.

On the "Information Superhighway" we are all driving the equivalent of an 8-mpg mid-1970's pimp barge.    Ugly and ostentatious, and slathered with unnecessary doo-dads, those automotive eyesores were inefficient, ugly, and guzzled gas.

Our internet is the same way - and our computers.   In the old days, you could store data in ASCII format, with eight bits per character.   Word processing programs like WordPerfect added formatting codes, which increased file sizes somewhat - but still kept them down to kilobytes.   Microsoft Word, on the other hand, can't seem to store even a blank document in anything less than a megabyte, as everything has "metadata" and formatting codes for everything from font size and color to page formatting and backgrounds.

The Internet has the same problem.   On old ASCII newsgroups, we typed in postings in ASCII which used 8 bits per character.   Today, we have HTML websites which are embedded with lines and lines of formatting codes as well as java scripts and embedded flash animation, videos, and the like.

Logging onto the bank website requires that you download a ton of data, just to ask for a few numbers (your bank balance and checks cleared).   Since we have more bandwidth, and bandwidth is free, most of us don't notice this and don't complain - until we are forced into a slow-bandwidth connection like an overwhelmed router at the coffee shop.

Now bear in mind that when I say "Bandwidth" there are two definitions that come to mind.  The first is the speed at which you access the Internet.  Already, most ISPs are charging by speed, charging people more if they want top speeds, and less if they only need to access e-mail.    This is one technique that is used to "ration" people from over-using their connection.

A second is download and upload limits - where you are charged an extra fee if your downloads or uploads exceed a certain limit every month, usually measured in Gigabytes.    So far, these have proven very unpopular and hard to implement.    But they are becoming more prevalent and the ISPs are threatening to enforce these limits soon, unless some agreement can be reached.  Cell phone providers are already there, for the most part.

Netflix and video streaming are set to break the back of the Internet.   And Internet service providers are finally saying that "too cheap to meter" is not a viable business proposition.   Netflix alone accounts for the lion's share of internet traffic - just as that French Canadian who is Skyping at the coffee shop is the one hogging all the bandwidth there.

Being charged by the Megabyte or Gigabyte will become the norm, not the exception, in coming years.   Already, phone companies (whose bandwidth is limited even further) are reining in "unlimited bandwidth" contracts, or making them more expensive.  The trend is toward metering, and it is a trend that most of us are dreading.

The party is over.   It was quite a ride.

Even assuming that the ISPs can come up with a deal with Netflix, and improved infrastructure, the problem won't go away.    So long as bandwidth is "free" people will use it like water, and leave the faucet on for hours at a time.   Think about it, if electricity was "free" you've never turn off your lights, and your house would be toasty warm in the winter and ice cold in the summer.   It is human nature to not conserve when there are no consequences.

So long as bandwidth is free, we will continue to squander it, in new and more wasteful ways.  It is not a matter of if something will happen, but when.

In the city of Atlanta, during the drought, no one conserved water when the implementation mechanism was public service announcements.   When people started getting fined for watering their lawns or washing cars, people cut back.   When they got $3000 water bills, they cut way back.   It is human nature - we don't act until it actually costs us.

Now imagine that there was a bandwidth shortage on the Internet, what will happen?

Will we start rationing our use?  Or looking for more "efficient" websites that don't squander bandwidth with unnecessary flash animation, videos, and other HTML crappy junk that doesn't add to the user experience?

I hope so.  Because frankly, we need to start being more efficient in our coding.   For too long, bandwidth has been free, and we've become lazy and complacent.

Church Bling

Church Bling is nothing new.


Recent reports about the excesses in the Catholic Church are giving many pause.  The Archbishop of Atlanta built a $2.2 million home in Buckhead, using money earmarked for "Charity".   But no one can top the fellow above (in a vintage BMW 328 roadster) who spent a whopping $42 Million remodeling his house and "offices".

People are acting all appalled, but when you think about it, Church Bling is nothing new.   And one could argue that without Church Bling, some of the greatest works of art of all time, including the Sistine Chapel, would never have been created.

But arguably, art and cathedrals are public works, available for everyone to view, and thus are for a greater good - not for private use.

On the other hand, excessive salaries, elaborate homes, private jets, and the like, seem somewhat inappropriate for a "Man of God" who claims to be the "Shepard of his Flock".   Yet many churches have been doing this for years - particularly the evangelical type.  Remember Jim and Tammy Faye?

But Church Bling exists on a smaller scale as well.   Here on the island, we have a number of churches, and most of them own a home as well, which ostensibly was for the pastor to live in.   As most of the churches have tiny congregations (a few dozen, at best) most have moved to a part-time pastors.   But the houses remain.

Some, no doubt, were donated to the church by congregants, in their wills.   What does a church want with a house that is not used?   Well, some, like the Methodists, are pragmatic, and rent out the house and then use the money for the church - to help pay the light bill or whatever.   This seems like a logical idea.   Selling the house would be another - and using the money to improve the church.

Others, like the Baptists, decided to keep their house as a private clubhouse for a weekly party - er, I mean, prayer meeting, which for some reason, cannot be held at the church or in the meeting hall attached to the church (isn't that what a meeting hall is for?).  They pay insurance, utilities and maintenance on a separate home, just to use as a once-a-week meeting place, in addition to the church itself.

So, a $400,000 asset, which is now tax-free, sits vacant for six days a week, and on Saturday, they all park on the lawn and have a little get-together until late at night.   Because that's what a church is all about, right?   Having a private little club that you can get together with, with your friends.

Others have this weird idea that a church should be all about God.  Or maybe helping the poor, or maybe spreading the word of Christ.  For others, it's board games and refreshments.  They also serve the Lord, who play Parcheesi.

One of these "church ladies" came to our garage sale.  The "church clubhouse" is only two doors down from us.   She mentioned she was with the church and that they held their weekly "meetings" there on Saturday night.  "I just wanted you to know we're here," she said, in somewhat ominous tones.  Sort of a "watch your shit, buddy, we're keeping an eye on you!" kind of statement.

But sadly, that sort of attitude reflects how most people view their religions - as a private club that only they can join, because they have the inside track to God, and God likes them best!

This is why, for example, many churches are not evangelical, as they really don't want new members, but prefer to isolate themselves in a contained social group.   New members would threaten the social structure of an existing church.   You know, people like Edna, who would come in with all her wacky new ideas which would need to be shouted down.

And that is why church attendance is down for most major religions.   People just don't want to go anymore, and when they do go, they don't feel welcome.   "This is our private little God club" the members say, "Go away!"

And increasingly, people question what they are giving their money to.   When a Bishop spends $42 million sprucing up the house, you have to ask yourself, when you can barely make your mortgage payment, whether you should "tithe" 10% to the church.

The new modern Mega-Churches at least spend their money (most of the time) on infrastructure that serves the congregation.   These Mega-Churches and their attendant bookstores, coffeehouses, meeting rooms, and the like, provide things like day care, AAA meetings, counseling, and activities for parishioners, in addition to church services.

But you have to wonder, is building a $20 million church to do this, really serving God, or just creating a really cool clubhouse for the faithful?

God doesn't want your money, that's for sure.  He can't spend it.   I suppose he appreciates a fancy cathedral or some really amazing church art.   But private clubhouses for the elite?   Probably a bad idea.