Thursday, January 17, 2019

Oh, Brave New World!


There are upsides to this new economy.

I realize that my last posting comes across as a bit of sour grapes.  I don't want to end up as one of those guys who claims that carburetors are better than fuel injection and the good old days are gone for good.  Things are changing, and as you get older, change is harder to accept.  However, I do realize there are a lot of advantages to our new modern world.

Although most software packages are indeed sold on a monthly subscription basis these days, a reader points out that it is still possible to buy a copy of QuickBooks - albeit for nearly $200 - and install it on your Windows 10 computer.  And I guess Windows 10 isn't all that bad, although I don't see the point of trying to make your laptop look like a cell phone.

Other readers (that posting generated a record response) suggested installing Linux, or using a Virtual Machine (VM) which sort of misses the point.   Linux is nice and all, but I am not sure what installing all new software does for me (I would have to "start over" with all my finances) other than to make an older computer run faster - for a while.  And by the way, why didn't anyone seize on this idea and sell cheaper Linux-based computers with open-sourced software back in the day?  They could have undercut the Microsoft monopoly by $100 a machine, at least.   But I think that ship has sailed - my next "computer" will likely be a phone, or a netbook or tablet.   As  I get older, my needs to compute become less and less.

But getting back to the main point, we do live in a wonderful era.  Maybe we have lost some of the simplicity of the past, but we have gained much more in the process.  For example, the rights of women and minorities are far greater than they ever were in the past.  Today, we wring our hands over whether a man shaving is an act of sexual aggression, whereas in the past, the big debate was exactly how many times a man can beat up his wife before it's considered spousal abuse.

And while we may be moving toward a rental economy, some of the things we can rent are pretty amazing.  These self-driving cars of the future - whose future may arrive within a decade - might not be something you want to own, anyway.  As technology becomes more and more complicated, it becomes harder and harder for the average individual to repair.  Of course, we want to make sure that there is healthy competition in this marketplace. Otherwise when you dial for a ride on your cell phone, you may be shocked to find out it costs you $100 just to go to the grocery store and back.  Of course, by then, maybe you'll have all your groceries delivered.  The downside to this, of course, is that maybe you'll never leave home.  That's not very healthy.

Of course, even as technology becomes more complicated, technology sometimes provides the answers.  I noted before that you can fix a lot of problems with these modern cars if you have an inexpensive code reader and can read the error codes from the car's computer system.  Type in the make, model, and year of your car, plus the error code, and chances are you'll find a discussion group where somebody's having the same, if not identical, problem.  Scroll through the facile answers that float to the top of the discussion and you may find the actual cure for your problem, and maybe an inexpensive cure at that.

And while technology does get more complex, it also becomes more inexpensive.  Our standard of living today is far better than in the past, despite what some people want to sell you.   We are fatter, healthier (ironically), and have more toys to play with, nicer (and larger) houses to live in, fancier cars, better clothes (and more of them) and so on and so forth.   When I was a kid, only "rich" people had air conditioning in their cars - or even their houses!  Today, even the poorest have both.

We are better off today with all this tech, even if there are downsides.

So take my previous posting with a grain of salt - the frustration of an older generation finally sick and tired of all this "newfangled" stuff that always seems to have one hand in your wallet - sometimes literally.   It is possible to have all this tech and not pay monthly subscription fees until you are broke.

Because the bottom line is, if you signed up for all the monthly fees for all this crap - from video streaming services, to XM radio, to cable television, to software rental, to Onstar car monitoring, to an alarm service, to extended warranties, to Amazon Prime, to - whatever else they think up this month - you would go quickly broke - or at the very least, be missing a few hundred grand from your retirement account by the time you retire.

In the meantime, I'll keep flogging this decade-old laptop and 20-year-old software for another few years.   My experience illustrates why the PC market basically died - they made a product that didn't really need updating anymore, so other than replacement sales, there was no compelling reason to buy.  So people stopped buying.

This is something Apple should realize with its smartphones, perhaps.  Or maybe they are realizing.

I suspect they will come up with some "new" tech that necessitates bricking all their older phones, as they are wont to do.   It is that sort of thing that sticks in my craw - not the newfangled tech, but the newfangled ripoffs.

Wednesday, January 16, 2019

Slave To The Machine - The Impersonal Computer


The PC promised to liberate us from the tyranny of the mainframe and IBM.  Today, we are now enslaved to a new online master.

I was very sad today.  We are going away for a short trip and I was wondering whether to bring my laptop with me.  I keep track of all my expenses on a 2002 version of Quickbooks, which I realize is nearly 20 years old.   I write documents on Word 2000 which is even older.   All my software is obsolete, but it was bought and paid for, and works as well as any of these newer versions do.

And the newer versions, you cannot buy.   You can only rent them online for a low, low monthly fee of paying forever through the nose.    $9.99 a month for Quickbooks doesn't sound so bad, until you realize that in one year, you've paid more than what you would have for the original software.

Not only that, the prospect of subscription fatigue sets in - the slow death of 1,000 cuts for all the subscription services in your life - from cable television, to online streaming services, to various software "subscriptions" and so forth.   Why pay for something perpetually when you can own it outright?

As my example illustrates, you can run a piece of software for decades after you've paid for it, and it works perfectly fine.  Well, except that the people who write the software decide to come up with new formats and forms that are not supported by your old version - such as the "docx" gag used by Microsoft to force people to upgrade to the latest version of Word.

Or take Quickbooks.   My original version - from the 1990's - worked very well.  But my accountant would tell me that she could not import my data into her newest version, so I was forced to upgrade twice.   When she passed away, I went to TurboTax and stopped upgrading.   I guess that was in 2002 - may she rest in peace.

But now that I am retired, I use the computer less and less.  I write these missives and I balance my books every day on Quickbooks.    Having your own financial records is important.  Relying on your bank's software is like flying blind.   Let me explain why.

In boating, you have a depth finder on the stern of your boat.  It is a useful thing to have, as it tells you the depth of the water you are on.  But at 25 knots, on plane, you only know the depth of the water you were in, and not the depth of the water where you are going.  Nice bit of information, that.

A GPS with a moving-map display will show you charts that indicate the dept of the water where you are headed to, which is good to know, as you can change course before you run aground.

In the same way, banking software (online apps from your bank) are nice to have, but only tell you about things that have already happened - the depth of the water you have already passed over.   Your own financial software, kept current and up-to-date tells you what expenses are upcoming and what checks (themselves an antiquated concept) or automatic debits are outstanding.   You can tell what your balance will be, not just what it was.   Good thing to know, that.

Because with this information, you can balance your accounts to the penny and never bounce a check, overdraw an account, or go over your credit limit.   And if you program it right (with reminders and autopay) you can never miss a credit card payment or other loan obligation.   Tracking all of my expenses in Quickbooks was one way I was able to dig my way out of my financial mess.

But sadly, those days are gone.  And the way the computer business is working, they are gone for good.   My old laptop, running Windows 7 Ultimate, is woefully obsolete (but still working, nevertheless).   When it dies (and its mate dies as well) I will have to "upgrade" to Windows 10, or a Chromebook, or God forbid, some Apple product costing thousands of dollars.

And I will have to rent my software if I want to keep writing things or using financial software.   I looked into using a Quickbooks "app" but found the ones online to be woefully inadequate.  Not only are they very superficial, they cost $9.99 a month to use.   That's not saving me any money.

Perhaps I will give up balancing my accounts and go back to bouncing checks.   It is sad that I cannot go online to my Bank's app and enter pending checks and charges which would be helpful.   I will have to work something out.

But what made me very sad was that the machine that promised so much back in the 1970s - to liberate us from corporate tyranny - has been co-opted into a machine of slavery.  The PC had been supplanted by the smart phone, a set of gilded shackles that so many are proud to wear and show off.   It doesn't save you money, it only helps you spend it, with monthly subscription fees and helpful suggestions on how to "save" by buying more crap - usually on Amazon.

Owning the means of production was a mantra of Karl Marx.   If you have to rent everything in your life - including your money - you will always be a slave to the bank, the finance company, the leasing agency, the app store, and so forth.    You will never have, you will only borrow.

I guess the new generation, raised on this idea, doesn't see the problem with this.  Huge corporations are buying up housing stock in the US (and building more) and renting it out to millennials who never see ownership as something they will enjoy, as they borrowed a college education they will never own - a worthless college education, in most cases.

Granted, there are so many wonderful things you can do with this new technology.   But I think we lost something there - owning.   When you owned your own PC and knew every single thing about how it worked (likely because you built it) and knew every file in every directory on the hard drive (because there was only 40 MB or so of it) you had power over the machine.   You ran it, it didn't run you.

Today?   We wonder what these "background jobs" and oddball files are, running on our computers.  We have no idea why with each "update" the machine runs slower and slower.   We just hand over our money and hope it all works OK - and as a result are more vulnerable to viruses, hacking, and guys from India calling claiming to be from "Microsoft Computers".

The Personal Computer was a beautiful dream - a dream that has died.

Saturday, January 12, 2019

Suggested Text

What would happen if I just clicked on the first word the Blogger predictive editor suggests?  Let's try it:

I received some mail from two readers on different subjects which nearly dovetail with one another in the seventies and being one of the only people on the Titanic felt the ship could not be sinking.

The young man of the article before they start bringing in nasty little details like accusations of gang affiliation to the main point, but the school isn't saying if they can't comment on these cases.

It could be that he drew gang symbols in the wall of my generation.   The other problem is sometimes companies actually need this money in order to make ends meet.   Somewhere along the way it was decided that federal student loans should be exempt from bankruptcy because a lot more money from cash flow of the stock market apocalypse.

So you come by the next week and now the toaster oven sells at Walmart for a while.   But of the story of my existence is not a taxable event until they actually sell their stock.   If we are indeed headed for a truck route and you were told what rates you could charge for a truck, you might want to buy a toaster oven from a company that's going out of business.

So if the item is defective, your uncle shows up with a dead body in the back of his pickup truck and asked you to help bury the corpse.  In addition, we are treated to a new town for a recession and we can afford them.

Today they advertised on billboards and television and found these days so much more likely to be less productive as well as mortgage interest.

* * *

Fascinating.   It suggests words from recent posts as well as drafts.  Sometimes it forms almost complete sentences before going off the rails in a somewhat hilarious way.

Gee, Google doesn't need me at all!

On the other hand,  if you wanted to drive a lot, but the school isn't saying if they are weird, I recall flying out of business because of the Democrats.

Thursday, January 10, 2019

Co-opting Word-of-Mouth

Image result for word of mouth


Today, I received this missive:

Hi Robert, 
We noticed that you run a nice blog at livingstingy.blogspot.com .  [Spam Company] would like to sponsor a post on your blog.  We are willing to pay a onetime fee to insert a Marketing message in one of your existing posts.  An example message is: “Two useful technologies for working from anywhere – [SPAM] and [SPAM].”, with two dofollow links going to our websites. 
We are a leading [SPAM] provider for the last 14 years with excellent products that your audience could use.
I look forward to your reply.

Kind Regards,
Adrian

As you can imagine, I have redacted any information to their company, so I am not inadvertently advertising their services.

I also received follow-ups to previous pleas, one when I asked for more information:

Hi Robert,
Thanks for getting back to me. 
To give you an idea on what we do, we would be looking to write sponsored content for your site. This content would usually come in the form of a 500-word article and would include a ‘do-follow’ link to our client. The writer of the article would spend time on your site and get a feel for tone, style, and the type of content you usually post. They can go and write a tailored article for your blog. You can review, edit and reject the article if you find it not suitable. We want to contribute to your site and pay you for the privilege of posting it. However, we don't divulge the name of our clients or brands at this stage - normally only when the articles are sent over for review.
As long as you are comfortable, we would also request that the post not be marked as ‘sponsored’.
In this regard, would you accept sponsored posts? As a verification and confirmation, could you send me the specific name of your site/s if this is something you would be interested in?

Regards,
Katie

And this one:

Hi there,
I wanted to followup and see if you had a chance to look over my email. Please let me know!
Original Message
Hi there, 
I wanted to let you know about a resource we have that can be great additional information for your readers on this page: http://livingstingy.blogspot.com/2012/10/another-reason-not-to-get-reverse.html
The resource I'm referring to is an article we recently updated called  [SPAM ARTICLE]. Within it we explain the different reasons for [SPAM]. 
You can view the full article here:  [SPAM ARTICLE] 
I think your readers who are learning about reverse mortgages would find this article beneficial.
If this content doesn't seem like a good fit for your page, but you would be interested in a high quality guest post on your blog about a different topic, we would be happy to write something for you. 
I appreciate your time and look forward to hearing back soon. 
Best,Andrew

What Adrian, Katie, and Andrew all have in common is that they are trying to co-opt word of mouth.  If they try to sell their services or goods or whatever directly, it comes across as commercial and smarmy.   People don't trust advertisement anymore, not since the government has taken a "hands off" approach to false advertising and slashed the budgets of enforcement agencies like the FTC.

So what does that leave?  Word of mouth.  People will buy things from people they trust - and they are hoping that a reader of my blog would trust me and be inclined to click on the links.   Of course, trust is a commodity in short supply - with a short shelf-life.  Violate people's trust, and they flee in droves.  Facebook may discover this, eventually (then again, maybe not, Facebook users are particularly gullible).

I rag a lot on Mr. Money Beard and Mr. Financial Kung-Fu, as they are trying to actually make a living by blogging.   As such, they have to monetize their blogs, which in turn, affects the trust thing.  So long as the links to advertisers are benign (and few are) you might be able to maintain that level of trust.  (I wonder sometimes if the "comments" section on those sites is shilled also, just as it is on Reddit).

But the people asking me to advertise are often people pushing the exact sort of financial mistakes and rip-offs that I rail against.  Kind of stupid, no?   Or am I being stupid for not taking $20 for an advert that will end up costing a reader thousands of dollars (or tens of thousands) if his house is foreclosed upon in a reverse mortgage gone horribly wrong.

It is a jungle out there.   You have to be skeptical of everyone, including me.

Lampert's Sears Strategy


Can he pull a rabbit out of a hat?

In some of my very earliest blog postings from almost a decade ago, I opined that Sears was headed for bankruptcy.

But Sears, like General Motors before it, took a long time to crash. And even now, Eddie Lampert, the CEO and majority shareholder - and apparently one of the majority debt holders of Sears - is filing last-minute papers to try to resuscitate at least a scaled-down version of the storied catalog merchant.

By all accounts, Mr. Lampert is a smart guy, being a successful hedge fund manager and all.  But then again, the track record of these hedge fund managers seems to follow the same sort of pattern. These boy wonders make an awful lot of money for their clients in bull markets, where almost every stock purchase goes up in value.  Then, the market crashes, or they make a series of bad choices, and everyone wonders how they lost their golden touch.  Never confuse being lucky with being brilliant.

Lampert has made a lot of very odd moves in his management of Sears, many of which may be subject to litigation.  He has spun off and sold divisions and brand names and also sold off much of the real estate to a company that he controls.  This could very well be considered insider dealing.

But even then, one wonders what his secret plan is to make money from all of this.  After all, the real estate that any Sears store sits on really isn't worth a lot of money.  Leases for mall space are probably so worthless that you could give them away and not have any takers.

Who, in their right mind, would want to buy an abandoned Sears building?  It's not like people are chomping at the bit to move into these spaces.

It then struck me there are probably a number of rational scenarios where Lampert will make out with a ton of money in this deal.  Apparently he must have a secret plan to capitalize on all of this real estate and the demise of Sears.  He'll end up making billions of dollars and leaving everyone else destitute.

Such scenarios might include:

1.  It turns out that many of these Sears stores are sitting on buried piles of Nazi gold  that was secreted there after World War II.  Apparently Lampert is the only one who actually knows about this and he's been very carefully unwinding Sears so that he can get access to this real estate and dig up the Nazi hoard. 
2.  The US government concealed alien technology beneath the foundations of Sears buildings across the country back in the 1950s, when aliens crash-landed on the Earth.  In order to preserve secrecy and suppress this technology from the general public, the Air Force buried all of the relics from Area 51 underneath Sears stores across the nation. Lampert will unearth this technology and slowly offer it to the public, becoming the next Bill Gates or Mark Zuckerberg. 
3.  Lampert is actually a time traveler from the future.  Being from the future he knows that in the year 2020, a wave of nostalgia will wash across America as we hark back to simpler times.  People will start flocking back to America's malls to try to relive the 1970s experience.  The popularity of Sears fashions will skyrocket.  Sears "Tuffskin" jeans will outsell Levis 2 to 1, and will appear on runways in Milan and Paris.  Kenmore appliances will supplant the Wolfe ranges and Sub-Zero refrigerators shown in Architectural Digest.  Lampert will be sitting on a pile of money when this happens. 
4.  With the coming recession, tens of millions of Americans will be forced out of their jobs and many will lose their homes. The government will have to scramble to find space to house all these homeless people and they will lease empty Sears buildings from Eddie Lampert at a premium price. 
5.  Alternatively to #4, President Trump will stage a military coup and declared himself dictator for life.  Unlike the crazy internet rumors about Obama, instead of using Walmart stores as detention centers, abandoned Sears stores will be leased by the government to hold dissidents and Democrats.  Again, Lampert will be sitting in the catbird seat.
These all seem, to me, to be rational scenarios where Lampert could end up making a lot of money from his Sears Holdings.  Thus, if I was a banker or venture capitalist, I would be more than happy to lend him billions of dollars to rescue Sears.

Of course, most of these scenarios could occur without even closing the stores.   Let's face it - no one goes there anymore, so no one would notice if a Sears was turned into a detention camp for Hillary supporters or a homeless shelter.   Many of the stores already smell like the latter, and/or look like aunt Hattie's hoarding house.  Lampert could do whatever he wants to, and no one would be the wiser.  Indoor skating rinks?  Just a thought.

Of course, the Federal Government is already using abandoned Wal-Marts as detention centers for illegal aliens, so maybe Lampert has this as his back-up plan.

What would be an irrational scenario?  Well, the idea that you could just run the Sears chain, people would go there and spend money, and you'd make a profit selling commodity items.   That's just crazy, particularly when you haven't invested in the stores in nearly a decade.

Sunday, January 6, 2019

It's Not Just Me...


Both the Washington Post and New York Times have devolved into clickbait sites - according to a former editor of the Times!


I have noted before that it seems that the Post and the Times, once revered institutions (indeed, the latter being the "newspaper of record" in the past) seemed to have veered off into new territory.  Instead of traditional reporting of the who-what-where-when-why kind of deal, they offer opinion pieces - often freighted with emotional tags and high-index words - in place of news stories.  Indeed, even the headlines are politicized.

So instead of a critique of Trump's policies, we are treated to stories that Trump is "alone in the Whitehouse" and tromping around, talking to busts and paintings in a Nixonian way, asking in vain, "why do they want to impeach me?"

I was talking with a very smart person the other day - someone much smarter than myself. They had multiple graduate degrees and their main concern about the Trump Administration was the fact that Trump was alone in the White House like Macaulay Culkin and apparently losing his mind. They basically barfed up to me almost word-for-word an article from The Washington Post.

When some redneck barfs up a Fox news story to me word-for-word, I'm not really surprised. People who are not very smart get hooked by these sensationalist stories. What concerned me was that this person was a very smart person, but they were still hooked by these emotionally freighted opinion pieces masquerading as news.

This sort of "reporting" which is based on "confidential sources" and speculation isn't really news.  It isn't factually based, and what's more is irrelevant.   The right-wing press did the same sort of treatment of Clinton - claiming that Hillary was throwing lamps at Bill and screaming at him - as if that was more important a story than welfare reform or balancing the budget.

Policies are what matters, and maybe that is why the press is seizing on these trivial stories.  Because when you come right down to it, Trump's policies are pretty standard Republican stuff.   Standard, except perhaps for the deficit spending (although that seems to be a new GOP tradition) and the tariffs (which were a GOP tradition in Teddy Roosevelt's day).   What the "Impeach Trump!" crowd doesn't seem to register is that when Trump is removed, Vice-President Pence becomes commander-in-chief, and he has an even more radical agenda to promote.

The Hill, which is an online newspaper filled with pop-ups, pop-unders, and auto-loading videos, recently reported that the former editor of the Times is saying the same thing.  Note:  You may not want to click on the link to the original story, as the SPAM on "The Hill" may lock up your computer for several minutes, and you will have to "X" out of several ads and videos just to read the article.  Another example of journalism in this new age!   But anyway, from the article:

Abramson, who served as the Times's top news editor from 2011 until her firing in 2014, criticizes current executive editor Dean Baquet in her forthcoming book, saying some of the publication's news articles have become “unmistakably anti-Trump.” 
“Though Baquet said publicly he didn’t want the Times to be the opposition party, his news pages were unmistakably anti-Trump,” Abramson wrote in the book, excerpts of which were released this week. 
“Some headlines contained raw opinion, as did some of the stories that were labeled as news analysis.” 
She argues that the Times has been motivated to slant its coverage to be critical of Trump after adding more than 600,000 subscribers during his first six months in office. 
“Given its mostly liberal audience, there was an implicit financial reward for the Times in running lots of Trump stories, almost all of them negative: they drove big traffic numbers and, despite the blip of cancellations after the election, inflated subscription orders to levels no one anticipated," Abramson wrote. 
Abramson argued in her book that the Times’s longtime rival, The Washington Post, is also guilty of mixing opinion stories with unbiased new stories
In other words, this move to Trump-bashing news isn't about a "liberal bias" against Trump, it is merely good business practice these days, as Trump-bashing articles generate a lot of clicks, and thus revenue for cash-starved newspapers who are on the brink of extinction, nationwide.   To put it more succinctly, we are the problem, not the newspapers.  They are only feeding "raw meat" to the lions, which is what the lions want.

I ran into this same effect when I monetized my blog for a year as an experiment (and I may do it again, just to make some spare change, the way the economy is going!).   During the election, anything I said about Hillary or Trump generated a lot of hits and thus a lot of cash for me (several hundred dollars!).

A fellow in California said the same thing, before his website was shut down.  He made up news stories about Hillary and Trump and found that the rabid Trump supporters would click on anything he said about Hillary, even that she was a reptile space-alien.   He made thousands of dollars a week this way, but of course, after the election, it all died down quite a bit.  He was the one who coined the phrase "red meat" - he noted that if he threw "red meat" to his readers, they ate it up and his click-through revenue went through the roof.

One would think that Trump would understand this more than anyone else.  His entire business model as of late has been in generating controversy as a television reality star.  The New York Times and Washington Post are just following suit, saying outlandish things and hoping it generates some click revenue.

Today, the Times and the Post bury the substantial articles in the back pages and put the emotional click-bait grab-you-by-the-balls stuff on the front page.   They are doing this to survive because in this day and age, they can tell what we like to read, so they give us more of the same.

There is a lot not to like about Trump, including the low-level corruption (or  perhaps high-level) as well has his specific policies.   Deficit spending and tariffs could derail the economy but... BORING!  Yea, you were falling asleep there, weren't you?   You'd rather hear juicy gossip about America's newest Kardashians, amirite?  Maybe this week, Jared will get a sex change - if he already hasn't!

We have an acting attorney general caught up in an invention broker scheme.  It is about as bad as if he ran a chain of check-cashing stores.  But to explain the con and why it is such a bad thing takes more than one tweet can contain.   We have devolved into a nation of tweets, sound-bites, and headlines.   And no one can read anymore, or hold a coherent thought.   Vonnegaut's nightmare of the future has been realized.

So we don't see any in-depth reporting on this.   The news media keeps score on the economy based on the DJIA and how many points it lurches upward and downward every day (with increasing frequency - something no one wants to talk about).    Political coverage today sounds like coverage of Vietnam back in 1968 - where we are treated to a nightly "body count" of people indicted or sent to jail or under investigation.   But there is no word as to what is actually going on, and we, the viewers, can't really make it all out, based on the two-minute clips of the fighting.

And apparently, we like this stuff which is why they do it.   The problem is, of course, that often we click on these "clickbait" stories just to see how outlandish they are, or because the headlines pique our curiosity.   So even as we decry clickbait journalism, we end up enhancing it.

Of course, one could argue that this sort of thing has been going on for a long time.  The phrase "yellow journalism" is over a hundred years old. And we've always had tabloid newspapers which relied on sensationalist headlines to generate sales.  But in the past, we always expected the mainstream newspapers to do the right thing - eventually. I'm not sure that's going to happen in this modern electronic age.

Seems we can't win, doesn't it?

Saturday, January 5, 2019

Something for Nothing


Why do people believe they can get something for nothing?

Be Your Own Boss!  Work from home!  Make thousands a month with only a few hours work!  Our free money system will teach you how to make millions without any effort, work, or money on your part!  Sign up now!

You would think, after a few decades, that these sales pitches would fall on deaf ears. After all, this sort of nonsense has been going on since before I was born.  But the same old siren song ensnares a new generation every few years, who spend what little money they have on dreams of avarice, only to see it all fall apart in spectacular fashion.

A recent article in The Atlantic recounts how a young couple spent their life savings of $40,000 trying to sell things on Amazon.  They saw a podcast - and nothing ever good comes of a podcast - about how to make money buying stuff cheap from China and then selling it on Amazon.  The guys who run the deal offer to coach you on how to do this for the low, low price of $3,999, which if you are astute is four grand.

(NOTE:  The idea that you can "make money" as a merchant middleman, whether it is this scheme or MLM or whatever, is far overstated.   In order to make money as a product distributor, you either need exclusive products, exclusive territories, or a huge volume of business and a razor-thin operating margin.   The minute you make dollar one in this sort of work, someone else gets into the same business willing to make 99 cents - and a race to the bottom begins.   Any job that involves sales itself is tough.  Any job that requires you to be a mercantile middleman can safely be called a con).

But of course, there's no secret how to sell things on Amazon.  Go to amazon.com - it's all explained right there in black and white.  But of course, a lot of people can't read these days so they need someone to teach them using podcast videos or whatnot.  Similarly, it's not hard to buy things from China - the Chinese are all too eager to sell you things.  That's why if you want some stuff for cheap, skip Amazon entirely and just go to eBay and buy directly from Chinese sellers who will send you oddly-shaped packages that take three weeks to arrive, but contain merchandise at startlingly low prices.

When you read stories about these sort of cons, the punchline is always the same: it isn't rich people getting caught up in this sort of nonsense, it is Joe working-class who squanders what little money he has on these wild schemes and then becomes embittered and disappointed.  But of course, the next week they sign up for an MLM scheme, convinced that this time around they are really going to make money.  The gullible never learn!

When I was a kid, we used to watch Jackie Gleason's The Honeymooners, which was a show about a sewer worker and a bus driver and their wives living in an apartment house in New York City, trying to make ends meet on blue-collar wages.  Almost every week, the boys come up with a scheme to make lots of money, and they spent what little money they had on these schemes, which always end up falling apart.

These were like educational videos - or should have been. They sent the message that trying to make money through a scheme is a pretty pointless waste of time.  Moreover, it told us that there were a host of con artists out there who will separate you from what little money you have with promises of riches - and you have to be astute enough to say "no" to them.

It almost all of these schemes, the victims never bother to ask themselves the most salient question: if this was such a money-making opportunity, why isn't the guy selling me the scheme engaging in this himself?  Why on Earth would you sell the goose that laid the golden egg when you can make more money with the golden eggs?

And this is what the two people who were profiled in the story failed to ask themselves.  Why are these guys with a podcast selling the secrets to Amazon when they could just be selling stuff on Amazon themselves?  In fact, by giving away these so-called "secrets" they're just creating more competition for their own sales channel.  If it was such a lucrative deal, they wouldn't be telling anybody about it but practicing it themselves.

But of course, to any thinking person, the answer is obvious.  You make a hell of a lot more money selling the "secrets" of selling on Amazon for $4,000 a throw, than you would actually selling products.  Moreover, it's a hell of a lot less work than actually selling the products.

Nevertheless, I don't expect this sort of thing to go away anytime soon. Like I said it's been around since before I was born, and it continues even today.  And despite articles like this in The Atlantic, which should alert people these sort of things are scams, more and more people get caught up in them everyday, never learning from experience of others, much less from their own experiences.

Sadly, this is the way of the world.  There will always be sharp operators willing to take money away from the poorest people.  And it will always be poor people who really don't understand how money  works, because they are not very smart, even though they're probably decent hard-working people.  As Jesus said, "the poor will always be with us," because they always make poor decisions.

And sadly I don't think all the rules, regulations, and consumer protection agencies in the world can put an end to this anytime soon, because they haven't been able to put an end to it for over a millennia.

Maybe articles like this in The Atlantic will educate consumers not to get conned by these deals.   But I doubt it.   Do you think the folks who send off $4000 to some guys with a podcast are reading The Atlantic?  Or reading at all?

Hey, right there, in the open, is the secret to wealth: learning to read and then reading.

Friday, January 4, 2019

Can Smart People Be That Dumb? You Betcha!

Image result for dumb blonde

How does $11,000 go missing from your credit card account without you noticing it, for years?

A recent Op-ed piece in the New York Times illustrates how low the bar is to write an Op-ed piece for the New York Times - and how clueless people are about money.   You wonder why six-figure salary people are living "paycheck to paycheck" and then you read this and it all becomes clear:

A few years ago, when I was self-employed and had recently had my second child, my husband went combing through my credit card statements, looking for tax deductions that I’d missed. I’m financially disorganized at the best of times, and with a baby and a toddler, I was barely even trying to keep track of my business expenses. So it’s not surprising that I hadn’t noticed the hundreds of dollars of weird recurring bank charges that my husband discovered.
It turned out I’d been signed up for a dubious program that purported to protect users’ credit in certain emergency situations. My bank had been accused of fraudulent practices in connection with it and fined $700 million by the Consumer Financial Protection Bureau, the government agency that was Senator Elizabeth Warren’s brainchild. I tried, maddeningly, to seek redress from the bank — cycling through phone trees, screaming at automated operators. No one could tell me how I’d been enrolled in the program, or for how long.
Eventually, I turned to the C.F.P.B. itself, filling out a simple form on its website. A few weeks later, I was notified that the bank had been deducting money from my account for years, and I was being refunded more than $11,000. Having financed my own maternity leave, it was money I badly needed.

WHAT THE FUCK?  Sorry, I just had to say that.  How trivial does money have to be in your life when you can just let eleven grand go missing and not notice it?

What is even odder is that she can't even be bothered with the details.  There is some sort of "program" she was signed up for, but she can't recall the details of it, nor does she seem interested in telling us about it (again, the missing facts from any story are the real story).  I suspect it was some sort of overdraft protection scheme - the banks were doing that back in the 2000's - making it the default mode or not explaining it carefully when you clicked to sign up.   You could go over your credit limit and they would honor the charges, but sock you with hefty fees - like $30 to $100 a charge.

My banks offered this to me.   I read the offer and politely declined.  Sadly, the check box on the website was defaulted to "Sign me up!" and had to be manually unchecked.   Also, I haven't gone over my credit limit since I started this blog - rarely do I let my credit card balance exceed $1000 before paying it off - several times a month.  Stuff like this doesn't "just happen" - the consumer has to be willfully ignorant and lazy to let it occur.

Be that as it may, I am still not sure how you can rack up eleven grand this way, unless you are totally clueless about money, as well as a lot of other things.  "Oh, but I'm just a girl, tee-hee!  And I have babies, so my brains are gone!  Who has time to balance their accounts anyway?  Tee-hee, aren't I cute?"

This lady just set back the woman's movement by 100 years.  And yet she has the balls to offer her opinion about the next Presidential race.  That's the problem with Democracy - they let just anyone vote, even people who can't be bothered to check their credit card statement, which you can do on your freaking cell phone these days!  (I am just guessing, but there is four hours a day of facebooking and texting and tweeting on her phone, but she doesn't even have the credit card company app loaded on it!).

She goes on to endorse Elizabeth Warren.  If I was Elizabeth Warren, I'd ask for a retraction of that endorsement.   Or change your campaign slogan to, "Warren - the choice of clueless idiots!"

Elizabeth Warren has her heart in the right place, and the consumer protection agency is a good thing - although it will hardly stem the tide of financial fraud and abuse in this country.   So long as there are State Lotteries and Indian Casinos, people will be able to fritter away their money.   Even if you force the payday loan people to put their interest rates in 400-point type, people will still sign up.  They tried this with the timeshare people and the car leasing people - have you seen either of those go away?

The problem for Warren is Pocahontas.  Yes, it may be unfair, but it has stuck - and she stepped in the dogshit by having a DNA test done.   What was going through her mind when she put down "Native American" on her applications for graduate school (and elsewhere, apparently) is anyone's guess.  And it wasn't just a one-time thing, either.  She apparently was listed as "minority" faculty based on this specious claim to native ancestry.  Specious or fraudulent - take your pick.

(NOTE: The Wikipedia page for Warren has been scrubbed clean of any indication that this controversy even exists.   The Post and Times of course, play it down.  She doesn't know how Harvard got this idea that she was the first minority professor to be tenured.  It's not like she checked it off on her job application form or anything, right?  But it appears she did - more than once in her life.   It isn't as trivial a matter as one might first think).

The gag that her family lore proclaimed they had an Indian ancestor is lame - my family has the same WASP-y story as well - that somehow we are descendant from, well, Pocahontas and John Smith.  I doubt it is true, or if it is, it is a tenuous connection that doesn't merit myself claiming Indian ancestry - anymore than it does Elizabeth Warren.

But no harm, no foul, right?   She's a good person and we should overlook things like that - like a Supreme Court justice dry-humping a girl when he was in high school.  Right?   Well, you may be right, but then again, this is an election, not a confirmation hearing.   In the latter, you need convince only 60 mostly middle-aged white Republican men to vote yes.   In an election, you need to convince the majority of the people - or the majority in enough States to get the electoral votes you need.

And in that regard, you don't need a candidate with a built-in scandal and name recognition based only on Trump's derogatory tagging.  "Elizabeth Warren?  Who's that?  Oh, right, Pocahontas!" - and that would be the reaction of many Democrats, much less Republicans.  Sadly, if she had just left that the hell alone she would have had a better chance.  The DNA test sealed the deal.  She should have apologized to Indian tribes for claiming this heritage on government forms and school applications.  That would have been a better move - "I fucked up.  I was young and stupid.  Sorry!"  Doubling down by actually claiming Native American heritage was the utterly tone-deaf wrong move.

That and she's too far to the left.  You may have noticed that the world has lurched to the Right.  It isn't just America, it is everywhere.   People across the planet are embracing "get it done" strongmen, and our country is no exception.  We can't beat Trump by going wacky-liberal, it just won't work.

Elizabeth Warren has a good job to do in the Senate where she should stay and help out the Democratic cause.   But President?   All she would do is cause the Independents to scratch their head and again wonder what Democrats have been smoking, and either stay home on election day or hold their nose and vote Trump.

Democrats can do better than this.  And the New York Times editorial page can do better as well.

CAVEAT:  I would have a helluva lot more respect for this Op-ed author if she bothered to figure out what the "program" she signed up for was, rather than acting dumb.   She also should have owned up to her own malfeasance of not checking her bank balance and not challenging these charges for years, rather than simply blame the banks for malfeasance.   But hey, in this modern world, everything is someone else's fault!

Externalization!

The Retirement Economy and the Bottomless Purse

When your investments are increasing faster than you can spend money, life is great.  But then things change.... what happens?

In the last two years, we have experienced the "Trump Bump" - an artificial inflation of the economy, a bubble if you will, that was caused by mindless euphoria in the marketplace.   De-regulation would free up companies to make more money!  We'd all go back to burning coal!  A trade war with China would mean increased profits for American producers!  The new tax law would put more money into the hands of consumers, who in turn would bootstrap the economy!

Those were the theories.  Time will tell if they were right.   On the other hand, staggering debt, by consumers, companies and even our government, hangs over our heads like the sword of Damocles.  The longer we fail to address this issue, the worse it will be when we are forced to.   And no, the economy didn't grow enough to "pay for" the tax cut.

It seems the wild Wall-street party of the last two years is done and now we have to deal with the New Year's hangover.   It remains to seen whether this is something that can be cured with two aspirin and bed rest, or result in power-vomiting.

One problem for the economy and markets is that so much is driven by emotion and perception.  People bid up stocks during the first part of the Trump era on the notion that a "business-friendly" administration would unleash the vaunted power of American Capitalism.   That sort of didn't happen, actually.   But during the last two years, a funny thing happened - my portfolio, as well as that of many Americans, actually increased in value, even as we spent the money.

For me - and many other retirees of fairly modest means - this meant we had a bottomless purse.  No matter how much we spent, it seemed, there was more money in our investment accounts than there was the month before.   And that is a pretty fantastic thing, when it happens.   You become more confident in the economy and are inclined to spend more money as a result.   Hey, why not?  You can drop ten grand and your net worth still goes up by twenty!   Trump Bump!  Yea!

But of course, to folks like me, this something-for-nothing situation just serves to make me nervous.  Maybe I am a pessimist, or maybe just a realist.  But the gravy train, in my experience, never rolls on forever.

In the next few months, and indeed, in the last two, we've seen the market go down.   Suddenly, my net worth actually has decreased in value.   If I spend money now, that accelerates the decline in my net worth even further.   As you can imagine, there are probably a lot of other people in a similar boat - some being folks who are not even retired yet.  Even to a working stiff, spending money seems less attractive when your 401(k) dips in value, as does the value of your house.

And that is what happened in the spring of 2009 - we panicked.   Stocks went down, profits went down, and everyone pulled back from spending.  "Maybe now is not the time to buy a new car - our neighbors were just foreclosed upon!"   People get scared.

And for some, the coming months could get very scary.  With the bankruptcy of Sears and other retailers, it is possible that an awful lot of people will see their pensions cut in half.   How do you think that will affect their spending plans?

Once again, the snowball effect kicks in.   Bad news causes other bad news, and it snowballs out of control until it reaches a point where folks realize they were being overly-paranoid.   Even in the worst months of the 2008-2009 recession, most people still went to work, got a paycheck, and paid their bills.   A lot of people didn't of course, but it hardly was the majority of the country.   

The same was true in 1980, when high interest rates and high inflation strangled the economy.  Unemployment was near 10% back then - but 90% of us had jobs and paychecks and managed to do all right.   Well, at least I did.   There are always jobs for those willing to work, in any economy.

But nevertheless, I am sure that my spending will start to shrink in the coming months, as the economic bad news starts to pile up.  And my decreased spending will mean more economic bad news for the folks who sell me stuff, and the process bootstraps itself.

Of course, in a year or two, it will likely turn itself around, as it did in the past, and eventually will do in the future.

Well, that is, unless this debt thing causes more inflation and wipes us all out.

Cheerful thoughts!