Saturday, December 31, 2011


McDonald's Sales are up for the year, as is the stock price.  What is going on with McDonald's?

The big news at the end of the year is that McDonald's stock price is up 35% for the year.  Sales are up for the year - by 5% just in October, and another 7% in November  Even with the hyped stock price, the 70-cent-a-quarter dividend means the company is paying out at about 2.79%.  All this and they have even been raising prices during the year as well.

What is going on at McDonald's?  To be sure, the chain has always been a money-maker.  There is always a line at the McDonald's in Brunswick, and in Politically-Correct Ithaca.  And other chains are struggling.  Whataburger recently closed two stores locally, and arguably their food was better.

The stock price has gone up, up, up, which generally means it is a bad time to buy.

So how does McDonald's succeed where others fail?  What are they doing that is different or better than the competition?  It is hard to say, as the food is not particularly special or unique.  All fast-food burgers are pretty much interchangeable.  McDonald's has perhaps used the "dollar menu" to its advantage, to at least draw customers in (and then sell them an "upgrade" to a super-sized value meal).

A recent promotion is interesting - they offer "any sized drink" for a dollar.  Just guessing here, but they probably are not selling a lot of "small" drinks these days.  Soda is cheap, particularly when served from a fountain.  So even at a dollar-a-cup, they are making money on pop, no matter what the size is.  And the soda sale can lead to a more profitable McRib sale.

The question is, is this a good stock buy?  I contemplated buying the stock in January, and only wished now that I did.  As you can see from the price chart above, McDonald's did well, even in the recession of 2009.  And arguably they tend to do better in a sluggish economy, when people perceive it as a bargain in food (while it really isn't, but that's another story).  They are doing well overseas, which is part of the picture.  According to one link, breakfast sales and seasonal peppermint coffee drinks are adding to the bottom line.

McDonald's seems to pay a regular dividend - 61 cents a share earlier this year, and 70 cents a share this quarter.  But it was not always thus!  As you can see from the chart above (and the data below) the company really only started paying regular dividends in 1999.

Dividend History
Date Div*
11/29/11 0.700
08/30/11 0.610
05/27/11 0.610
02/25/11 0.610
11/29/10 0.610
08/30/10 0.550
05/27/10 0.550
02/25/10 0.550
11/27/09 0.550
08/28/09 0.500
06/04/09 0.500
02/26/09 0.500
11/26/08 0.500
08/28/08 0.375
06/05/08 0.375
02/28/08 0.375
11/13/07 1.500
11/13/06 1.000
11/10/05 0.670
11/10/04 0.550
11/12/03 0.400
11/13/02 0.235
11/13/01 0.225
11/13/00 0.215
11/29/99 0.049
08/30/99 0.049
05/27/99 0.049
03/11/99 0.049
11/25/98 0.045
08/27/98 0.045
05/28/98 0.045
02/25/98 0.041
11/26/97 0.041
08/27/97 0.041
05/29/97 0.041
02/26/97 0.037
11/27/96 0.037
08/28/96 0.037
05/31/96 0.037
02/27/96 0.034
11/28/95 0.034
08/29/95 0.034

Prior to that time, Mickey-D's was not a big dividend stock.   You could argue that this means the company has matured and no longer needs to plow money back into expansion - and that might be a good argument.  It also might mean that the company has nowhere to go, other than to watch margins, keep promoting the products, and trying to eke out a living on the margins on burger sales.

The company has a fairly healthy P/E ratio of 19.66 - so wouldn't this be a good buy?  Like I said, it was a good buy in February of this year.  Buying at the peak might be less a good deal.  And I suspect, that due to all the hoopla in the financial channels today about it being the "biggest winner of 2011" that a lot of people will go out Tuesday morning and do something really, really stupid:  buy the stock when it is high.

Part of the problem with the stock is Burger King.  Where is Burger King, you ask?  Good question.  The competition in the burger world is fractured and the No. 2 and No. 3 competitors (actually No. 5 & 7 in the fast food market, see below) are far behind McDonald's.  Both Wendy's and Burger King seem to have lost their way, and both have announced major menu changes to overhaul their foods, particularly their fries.   Wendy's fries were a disappointing bland, unsalted and undercooked potato - hardly anything the folks at McDonald's worried about.

Burger King, in particular, tried to narrow its market focus to the 18-34 year old male market, which was a strategy that seemed to backfire.  The giant fiberglass "King" head promos might have worked with this slacker demographic, but was not about to attract the egg-sandwich-and-coffee-on-the-way-to-work crowd. 

The competition, in an effort to distinguish itself from McDonald's, has faltered.  People are looking not for something different, but perhaps more of the same, perhaps at a lower price.  Have it your way is perhaps less appealing than marketers thought.  And Wendy's has always relied on an oddball menu that included chili and something called a "frostie" as well as square hamburgers.

The other chains might be seeing the writing on the wall now, though.  And if they can replicate McDonald's success simply by copying it (instead of trying to improve upon it), McDonald's could see sales slide a bit.  And it is not a hard model to copy - there are few barriers to entry in the burger field - no high technology, no huge investments, and no Patents to worry about.

The other problem I see for McDonald's is the recession - or the recovery, to be more precise.  The economy is improving, slowly, and 2012 will see further recovery, I believe.  Unemployment is edging down to the 8% mark (which is not far off where it should be normally) and consumer spending is up.  As people feel more secure about themselves and the economy, they will want to spend more, and when that happens, a McRib sandwich isn't going to cut it.

Between these two factors, I see the same-stores sales flattening out.  People can only eat so much of the same thing before they get sick of it.  And sometime soon, folks will begin to realize this food is horribly bad for you (but then again, well, people are fools).

The odd thing is, if you look at the price of the stock and the dividends in the long term, the last big peak was in 1999, and it bottomed out again in 2002.  If you were looking at the stock chart in 1999, it would look identical to the one today, albeit on a smaller scale.  And if you bought then, based on earnings in 1999, you'd be crying in 2002 when the stock dropped to 1/3 of its 1999 price.

McDonald's is not a bad stock to buy - you can make a lot of money off of other people's vices, after all.  But I think the stock price is a bit high right now for my tastes.  I think they could see a serious fall-off in profits next year if the economy recovers and their competitors get their act together.  Right now they are doing well, as they have the playing field to themselves.  In business, that is a scenario that rarely lasts very long.  Nature abhors a vacuum, and the people at Wendy's and Burger King are looking at McDonald's market share the way wolves view a meadow full of lambs.

If (and when) sales drop off at McDonald's, so will the profits, and so will dividends.  And that will drive down the stock price as well.  So it might not be a bad "long-term" buy in 2012, when the stock price levels or drops.  But I am not sure that at $100 a share, it is any big bargain right now.  If you bought it at $60 a share, I'd hang onto it - you are making 4.6% just in dividends.

Oddly enough, McDonald's biggest competitor isn't a burger joint, but Subway which is a franchise operation, whose parent company, Doctor's Associates, Inc. (DAI) is a privately held company.  As a franchise from a privately held company, financials on Subway are harder to come by.   And of course, many of their franchises are of the "gas station" variety - small operations that are tucked into fuel stops, Wal-Marts, and the like.

What are the 10 biggest fast food chains in the United States?
  1. Subway - 23,336 U.S. Locations
  2. McDonald's - 14,000 U.S. Locations
  3. Starbucks - 11,000 U.S. Locations
  4. Pizza Hut - 7,566 U.S. Locations
  5. Burger King - 7,233 U.S. Locations
  6. Dunkin' Donuts - 6,500 U.S. Locations
  7. Wendy's - 5,877 U.S. Locations
  8. Taco Bell - 5,604 U.S. Locations
  9. Kentucky Fried Chicken (KFC) - 5,162 U.S. Locations
  10. Domino's Pizza - 4,927 U.S. Locations

What is all the hoopla about Facebook?

The Facebook interface is really poorly done.  And for that reason, I cannot fathom why there is all the hoopla about it.

For example, if I try to find a person, say "John J. Jacobheimerschmidt" - it might actually find that person, as it is an unusual name.  But "John Smith"?  No way.  It will find hundreds of "John Smiths" or go to the "top result" but not find the one I am looking for.

OK, you say, no big deal, there are a lot of John Smiths out there.  But suppose it was a John Smith who was a friend of a friend of mine?  Or suppose it was a John Smith whose page I looked at 10 days ago?

Doncha think that, you know, with computers and all, the search engine would figure this out and direct me to that John Smith as the most likely hit?  Naw, that would be too, well, Google-like.

No, all Facebook does is a moderate "scrape" of your e-mail address book, and that's about it.  Not really very high-tech here, just a pretty simple interface.

And this is worth billions of dollars?  I just don't see it.

Explosion Movies

One of the biggest exports the U.S. has is culture, in the form of Hollywood movies.  And for Hollywood, an Explosion Movie is a safe bet.  You don't have to translate 'Bang!' and  'Ka-Pow!'

We just rented, through Netflix, 2012, the movie about the "end of the world" in 2012.  I am not sure how this ended up in my queue, but it arrived the other day in the familiar red envelope.   It is the only movie recently where I watched most of it at 2x, 8x, or even 50x speed.  It is a classic Hollywood Explosion Movie.  What is an Explosion Movie?  They are not hard to spot:

1.  They have a number of usually B-level stars, or A-level stars on their way down.

2.  There is an ensemble cast of actors from all over the world - the target audiences for "foreign sales".  In the case of 2012, this apparently includes Russia and India.

3.  There are more people in the credits for special effects and CGI then there are for live-action.  When they say "lighting effects" they are not talking about a guy aiming spotlights, but rather a man on a computer.  When you see "hair effects" they don't mean hairdresser, but a guy who draws hair for a living.  And when you see three pages of "shaders" you know you have an explosion movie.

4.  Product Placement is rampant - and often done such that you don't notice it.  In 2012, the assembled world leaders meet around a conference table, each with their own VAIO laoptop, with the logos clearly facing the camera square-on.  Could be a coincidence, I suppose.  Oh, wait, this is Hollywood, the land of whores.

5.  The soundtrack is loud and jarring.  If you see this in a theater, you will leave with your ears ringing.

6.  The dialog is just a clanking, wheezing cliche machine.  "Don't go back there!", "Give me your hand!", "For God's Sake, Jump!" - this stuff writes itself and is easy to translate.

7.  The plot is non-existent.  There is a threat to the world, people try to save it, explosions ensue, the hero and heroine finally meet up and view the wreckage as the titles roll.  2012 or Avatar, it really makes no difference.

8.  The Slacker/Striver sub-plot is used (the most popular plot in Holllywood these days, and there are only 11 plots in Hollywood).  The Husband/Boyfriend/Whatever is a slacker, and wants to get his Girlfriend/Wife/Whatever back.  She is "serious" and wants to get ahead and typically has left the Slacker for a yuppie jerk boyfriend.  We all look forward to him getting eaten by the dinosaur.

9. The musical soundtrack features some of "today's hottest artists" who either have written songs for the movie, or had their tunes adapted to it.  The sound track is for sale of course, and that is not by accident, but by design.

So what's the problem with these movies?  Well, they are repetitive, to be sure.  2012 was just a bad remake of The Day After Tomorrow or Independence Day or - whatever.  Hollywood screenwriters, I am sure, get these scripts out of a vending machine near their office - or perhaps give a homeless man a half-eaten hotdog for them.  Often, there are no writers at all, but a "Writer/Director" who ties together CGI and action scenes with a few lines of dialog and a paper-thin plot.  Shakespeare it ain't.

So this is our cultural export.  No wonder the world hates us.  We sell crap - bad movies, fast-food, and global hegemony.  They make a lot of money for the studios, who often make their real profits in "foreign sales."  And these movies, as I noted earlier, are designed for the foreign market, as they have no plot, two-dimensional characters, and little dialog to translate.

And they are full of very poor normative cues.  One recurring theme in these movies is the end-of-the-world, or global destruction, which is just assumed to be a good thing.  When the White House and Capitol get blown up (for the umpteenth time, in CGI) some character quips, "about time someone cleaned up that mess in Washington!" - to which I am sure there were redneck hoots in the audience at the 3-D IMAX theater.

While we may need to improve things slightly in our government, it is hardly "broken" as people like to say (if it is, it has been "broken" for over 200 years).  And whatever we need fixin' in D.C., I am not sure an alien invasion or mega-volcano or a return of the dinosaurs is really the right answer.

The normative cue that Hollywood is selling here is that our society, our Democracy - our government - are not worth saving.  Just blow it all up and start over.  The survivors will have a better time of it.  If you think about this, this is a very depressing normative cue and yet many people buy into it, either consciously or subconsciously.  The whole far-right Christian movement believes it fervently - that the "end times" are near - and that this is a good thing.

I find it disturbing, as not too long ago, this was a country of hope and promise.  We were conquering space, landing on the moon, and soon would explore other planets - perhaps even stars.  Now, it seems, we have just given up and decided to ride our civilization all the way down.  July 21, 1969 was the apex of our culture.  But of course, like 9/11 that was faked, right?  Sigh.

Depression, as I noted in earlier posts, makes people pliable and good consumers.   If you are butt-all depressed as hell, you feel like giving up.  But hey, why not buy a new 580 HP Camaro and finance it on onerous terms?  What the heck, the aliens will arrive and the world will explode before the balloon payment is due, right?

And in this regard, the explosion movie works both ends of the spectrum.  First, it gets you utterly depressed, consciously or subconsciously, by reinforcing the notion that the world is going to end, and moreover that the world ending is a good thing.  This makes you a nice pliable little consumer.  Second, through product placement, the explosion movie sells you all those great Armageddon Accessories for you to buy, now that you just don't care anymore about your own future.  Might as well live for today, right?

So what's not to like about explosion movies?  I guess the special effects and CGI were kind of cool - when the first ones came out over a decade ago.  But after you've seen the White House or the "HOLLYWOOD" sign blow up for the umpteenth time, it kind of gets, well, boring and repetitive.  And there is something very, very disturbing with this trend toward "end of the world" movies - and the fact that people seem to be rooting for the end times.

Maybe I am getting old, but I tend to like movies these days where there is actual dialog and character development, things aren't either on the verge of blowing up, blowing up, or blown up, and it is not posited that humanity deserves to be wiped off the face of the earth.

And it would be nice to watch a movie, for once, that was not a variation on one of the dozen or so plots Hollywood only seems to know.  And please, let's put the coffin nail into the Striver/Slacker plot line.  It is not only overdone, it is ripe with poor normative cues - that young men should be party animals and hang with their "buds", while women are just blank-page two-dimensional characters that always harp about responsibility all the time.  We need to put that to bed.

But, alas, I am not in that 16-35 white male demographic that Hollywood loves to market to.  When you stop buying, they stop talking to you.  Funny how that works!  But to some extent, it is a blessing, as at least they leave you alone.

Friday, December 30, 2011

Fear of Banks

Many people, particularly the poor and minorities, are afraid of banks.  Why is this?

I have addressed this phenomenon before here, the tendency of the very poor to not only get raw deals in life, but to apparently seek them out.  And when it comes to banking, the poor seem to seek the worst deals.  It makes no sense to me at all.

Payday loans, check-cashing stores, finance companies, rent-to-own furniture, buy-here-pay-here car lots, pawn shops, title pawn loans, money orders, and the like - all examples of bad financial bargains and marginal banking practices.  They charge high fees and staggering interest rates.  Why would anyone use these institutions, when you can cash a check, for free at the bank?  Why get a loan from a Payday loan place, when the bank is offering far lower interest?

Vance Packard, in The Hidden Persuaders, seems to have the answer:
"Dr. Dichter [investigated] the paradox of the the great growth of loan companies in spite of the fact most banks were offering loans at lower interest and were more lenient in accepting people for loans.  His conclusion was the loan company's big advantage over the bank was its lower moral tone!  The bank's big its stern image as a symbol of unemotional morality.  When we go to a banker for a loan, he points out, we are asking this personification of virtue to condescend to take a chance on us frail humans.  In contrast, when we go to the loan company for a loan, it is we are are the virtuous ones and the loan company is the villain we are temporarily forced to consort with.  Here, it is we, the borrowers, who do the condescending. ....  We shift from feeling like an 'an unreliable adolescent to filling like a morally righteous adult.  The higher cost of the loan is a small price indeed to pay for such a great change in outlook.' " (emphasis added)
When I read this, I nearly fell out of my chair.  The answer, which had been mystifying me for years, is is obvious and apparent, in retrospect.  And we've all been in this situation, at one time in our lives or another, having to go, hat-in-hand, to the banker for a car loan or home loan, and being told, politely, to buzz off.  But the finance company or the mortgage broker - they are your friends, eager for, and ready to compete for your business.

At the bank, we feel like a supplicant, begging for favors at the whim of the imperial banker.  We believe (wrongly) that we are "lucky" to get a loan.  We expect our bankers to be stern and strait-laced.  After all, we are entrusting them with our money, and don't want them taking wild chances doing something irresponsible, like loaning money to the likes of us!   At higher-interest finance companies, on the other hand, we feel it is they who are lucky to get our business and the entire tone of the transaction changes - they are friendly to us, and encouraging.  As well they should be, as they make a ton of money out of Joe and Josephine Paycheck.

Similarly, my immigrant friend went to a check-cashing store because she was afraid of the bank.  Her English skills were not great, and she felt that the people at the bank would be laughing at her, or somehow deport her (she had legal resident status) or otherwise get her into trouble.  And no doubt, such stories were spread and reinforced by La Tienda check-cashing store, where everyone was so friendly and spoke fluent Spanish - while charging her $25 to cash a check.

But of course, this is mostly a matter of attitude not of reality.  Once you are fairly well established, your local bank or credit union will loan you money - for a car loan or a mortgage - and usually on far better terms than a finance company.  Banks exist to loan money, and if they cannot make loans, they go broke.  But they want to make good loans, with low risks, and offer reasonable rates.

The bank above is Burke & Herbert Bank, in Alexandria, Virginia, the oldest bank in the Commonwealth.  I first met Taylor Burke by phone, when he called me about a loan I wanted, to buy my office building at 917 Duke Street.  We talked for a few moments and he asked me what interest rate I was looking for.  I optimistically was hoping for 9%, a good rate in 1995 for a commercial note.  He said "9.5%" and I replied, "I'd prefer 9" and he said, "We'll see."

I hung up the phone and wondered where on earth I had rented the balls to talk to the President of the local bank that way.  But one reason I did was I had nothing to lose - I needed more debt like a hole in my head.  Taking on a risky speculative Real Estate investment didn't seem like such a good idea, anyway.  Two weeks later, I showed up at the closing, and whaddya know?  The loan document is there (hand-typed) at 9%.

It turns out that Bank Presidents (or Vice Presidents) don't bite - or even bark much.  Being afraid of a bank - as the Father character (played so well by the underrated Christopher Walken) in the movie Catch Me If You Can so famously modeled - really makes no sense at all.

And my experience with Taylor Burke was no fluke.  I later refinanced the note with another local bank, making an acquaintance with a local banker, who later opened up his own bank (with a few of his friends), AccessNationalBank.  I invested $10,000 in that bank, it is worth over $50,000 today (and yea, I sold about half my stock in it, so I got my money back).  Banks, it turns out, are no big mystery.  They are a business, like any other - and they need paying customers to survive (emphasis on paying customers).

Banks live to loan money - it is how they make money.  They don't make money by making change.  Yet a lot of people would believe the latter.  Seriously.  How do they make money at it?  Volume.

And yet, many people are scared of banks - as the Packard quote above illustrates.  And when I was younger, I too, went to finance places and high-interest loan deals, convinced I was "lucky to get a loan" and that the interest rates charged were what I deserved.  And too, I also felt that, for the rates they charged, I could afford to treat them like the supplicant, to some extent.  After all, they were making good money off of me, they had no right to complain.

It was only when I got older and more confident - and more experienced - that I realized I was getting some pretty crummy loan deals.  And from then on, I never took any raw deals, junk fees, high interest rates, or other crap from the money-lenders.  And of course, some of those crummy loan deals I took out as a youth, I should have avoided entirely.

And it is all a matter of attitude.  And that is one interesting aspect of wealth is that your attitude affects how wealthy you are.  And by this, I don't mean some stupid "prosperity theology" nonsense, where you pray to Jesus for a new Lexus, but the simple act of changing your attitude toward financial institutions.  And no, by this I don't mean just spending money to "act rich" while running up debt.

A few years into my practice, I called my friend at the new bank and asked him about a loan.  I had several loans by them, for investment Real Estate, and was looking to do one more.  He looked at my financials and said that they didn't feel comfortable loaning me more money.  He was sorry, but that was it.  I told him not to be sorry, but thanked him instead, and he was a bit taken aback.  "When your banker tells you they won't loan you money," I said, "you should listen to that good advice and stop borrowing."  I thanked him for some good advice.

And he was giving good advice, too.  Borrow less, save more, and I started doing just that.  Too many other people think the banker is "being mean" in denying their loan, and instead turn toward high-interest rate, high-fee toxic loans, which are not only a bad deal, but usually the first slippery step toward bankruptcy.  If a conventional bank turns you down for a loan - listen to them.  Chances are, you should not be borrowing the money.  And in most cases, you don't "need" to borrow the money (no, a new car is not a "need" but a want).

Banks are your friend.  If you fear banks, ask yourself why.  If you are like one of the many thousands of people who post snarky comments about Bank of America on discussion groups - because they charged you a bounce fee, when you bounced a check - ask yourself if it is the bank's fault, or your own.  Living life as a supplicant - as passive victim of circumstances, begging for scraps - is never going to get you anywhere.  Being assertive - and fiscally responsible - will take you anywhere you want to go.

And you'd be surprised how friendly banks can be, when you have good credit, pay your bills on time, and aren't afraid to look the President of the Bank in the eye - and not blink.

Some Inexpensive Wines

A good wine, at a reasonable price.
Life is pretty good in the USA!

Fred Franzia, the head of Bronco Winery (the world's largest winery) once famously said, in a New Yorker interview, that there is no reason any bottle of wine should cost more than ten dollars.  While some wine purists cringe at this concept, his wines - even his "two buck Chuck" Charles Shaw wines, have garnered many awards and have scored very highly in blind taste tests.  Take the label and the price tag off, and the experts rate reasonably priced wines as high as, or often higher than, some exotic and expensive wines.

So why do people pay a lot of money for wine?  Status, in part.   It is a big deal to make a big show out of ordering a $50, $100, or $200 bottle of wine, having it decanted at the table and then making a big show out of sending it back.

I had a friend who did that, and it was fun, to order a different bottle for every course of the meal.  And of course, the restaurant owner loved him, as he was making a 100% markup on every bottle he served.  Everyone should do that once in life.  Maybe twice.  But it is not something I make a habit out of.

And just as expensive entrees are often placed in the menu to make the ordinary entrees seem reasonable in price, so are expensive wines placed on a wine list, to make the more plebeian wines seem like bargains. However,  that bottle of wine that cost "only $26" at the restaurant, retails for $18 at the wine store across the street, sells for $12 at the wholesale club, and  likely the restaurant owner paid $10 for it, in case lots.

Because of the "snob factor" and also the staggering cost of wine, a lot of people don't drink it, preferring instead, beer or mixed drinks.  Beer and cocktails are easier to understand - you see the same, limited number of brands out there and it is easier to pick something and then know what to expect, once it arrives.

Here are a few inexpensive wines (all usually under $10 a bottle, some well under) that are remarkably good, I think, regardless of the price.  These are table wines, of course, meant to be drunk, not kept as a talisman in your cellar.  Anyway, here is my short list:

Gnarly Head Old Vine Zinfandel:  I know what you are going to say - "I hate those sweet pink wines!"  But Zinfandel is not a wine, it is a grape, and "White Zin" has sullied the reputation of the Zinfandel grape to some extent (Disclaimer: Unless you like sweet wines, then, that's your bag, baby!  There is no "wrong answer" in wine, just what you like or don't like).

But the Zinfandel grape, when made into a red wine (by leaving the skins on) makes for a very nice, dry red, with a mouth feel that smacks the back of your tongue.  The first time I had this, it was like, whoa, tasty!  Good with cheese and crackers, or red meats and even Italian food.

This is a Californian wine, and supposedly the grapes come from older free-standing "head trained" vines (or, as they say on the website, inspired by it).  Either way, it makes a definite impression, and apparently I am not the only one to notice.  When I go to buy this, the stock is usually depleted.

About $7-10 a bottle, depending where you buy it.

Trumpeter Malbec:  Malbec wines are making a big hit these days, and Trumpeter is not a bad example of it.  It is an Argentinian wine, and many very good an inexpensive wines can be had these days from Argentina.  I believe we pay about $5.99 a bottle for this, making it an exceptional value.  Like the Zinfandel, it is dry and good with food.

There are a lot of other good Malbecs out there, including Cigar Box Malbec which is a little more costly and perhaps a bit drier.  It comes with a twist cap, but at this point, I think most consumers are closure agnostic.  Particularly in the table wine market, the type of closure is really irrelevant to quality, and some of the best wines in this market these days have twist caps, and some of the worst still use corks.  A cork is not an inherent sign of quality or price.

Rio Seco Malbec isn't bad, and is  $4.99 a bottle at the wholesale club.  One hesitates to buy wine that is so cheap.   But when you get it home, you are pleasantly surprised that you can get "so much, for so little."   You could spend $20 on a bottle of wine and be bitterly disappointed.  When you find a good $4.99 bottle, you feel like you robbed a bank.

Jaume Serra Cristalino:   I previously wrote about this excellent sparkling wine (Cava), which costs less than $7 a bottle.   Simply stated, this is the best-tasting dry sparkling wine in the sub-$10 category, and even bests other sparkling wines costing far more.  Move over Frixnet.  Forget about Korbel!  For less money, you can get something so much better!

Vendange Chardonnay:  Serious wine drinkers don't even consider white wines to be wine at all.  And perhaps there is some truth to this.   But white wine, in the summer time, can be refreshing, and it is great with sea food (although a good red works with fish, and cold beer and shrimp are a great combination as well!).  And likely, your friends will drink it, and it is very popular with women.

Many like a sweet wine - I have a friend who loves a particular brand of box wine which is on the sweet side for my tastes.  Another friend lives on Barefoot Pinot Grigio, which tends to make my jaw hurt, probably due to the sulfites or something.

But for me, I like something a little drier, and spending a lot of money on white wine is sort of pointless.  The best bargain around is the Vendange Chardonnay, which is sold in a two-pack of 1500 ml bottles for $11.99 at the wholesale club.  This is the equivalent of $6 for a large bottle, or $3 a bottle for a 750 ml bottle.  This is cheaper than two-buck Chuck.

If you are having a party for the "ladies who lunch" or perhaps an art gallery opening,  this stuff will fit the bill nicely.  Also a nice wine for a day at the beach, or with a light lunch.

Concha y Toro Casillero del Diablo Cabernet SauvignonConcha y Toro is another one of those Mega-Wineries, this one in Chile, which also has emerged (along with Argentina, Australia, and New Zealand) as a great source of inexpensive, yet well made wines.  They have a number of brands, including their less-expensive Frontera line, which comes in 1500 ml bottles.  The Casillero del Diablo is a very nice wine to serve with dinner that won't set you back very much.

These are all very good wines, but mostly table wines - nothing you would "lay down" in the cellar for years to age carefully.  These are wines meant to be drank and drank often.

There are plenty of other, similarly-priced wines out there.  Of course, again, it is all a matter of taste and whatever works for you is "right?" - right?

The point is, you don't have to spend a lot of money to enjoy some of the finer things in life.  And in fact, often the enjoyment is greater when you spend less.  A good wine at a bargain price is like a gift from God himself.

NOTE:  Prices quoted at the time of this writing.  Things have gone up a bit since then!

Thursday, December 29, 2011

Occupy Jekyll Island (OJI)

The sidewalk near my home.  Why would anyone want to live here?
Why would anyone want to live anywhere else?

I live on a resort island.  It is a State Park, and by law, two-thirds of the island has to remain undeveloped wilderness.  It is beautiful here, temperate for most of the year.  And it is largely abandoned.  Not many people come here, and even when they do, the island tends to swallow up folks, so you don't see a lot of people around.

Sounds idyllic, doesn't it?  Yet people scratch their heads and say "Why would you want to live there?"

When we first started coming here, 20 years ago, for Christmas, it was deathly quiet.  I loved it.  We looked at buying a house about 12 years back, but Mark said, "It's kind of creepy and quiet here, don't you think?"

"Yea," I replied, "Isn't it great?"

Why live on Jekyll Island?  Why not?

Perhaps it takes time and age to appreciate "creepy and quiet" in life.  And once you have it, it is very hard to go back.

Oddly enough, a lot of folks prefer to live among noise, bustle, stress, and strife.  Neighboring St. Simons Island is far more popular and, of course more populated, and housing prices there are far higher.  Why?  Because unlike our island, over there you can buy a "look at me!" house with a private view, and we don't have that sort of thing here.

Yes, oddly enough, we have the makings of a single-class egalitarian society here.  All the houses were built in the late 1960's and early 1970's, and are largely all alike - two to four bedroom brick ranch-style homes that are largely unimaginative.  You can't tell one apart from the other.  And since none were built on the water or golf course, few have spectacular views or ocean access.  A typical house here sells for about $300,000, which is not a lot of money - to live on a resort island.

But since few of the houses are built on the ocean, marsh, or golf course, this means that the views and ocean access are available for everyone, even visitors, not just a select few of rich folks who can afford to buy it.   In most beach-side communities, the oceanfront is spoken for by rows upon rows of expensive homes or high-rise condos.  Beach access, if it is permitted at all, is provided periodically with narrow lanes and few parking spaces.

And if you drive up and down the coast of the U.S. and Canada, and visit the barrier islands, from Corpus Christi, Texas, all the way to Prince Edward Island, you will see that it is pretty much that way everywhere you go - rows upon rows of beach houses, and a "strip" along Route 1 or A1A, with beach towel shops and fast-food restaurants.  Apparently people prefer to live that way.

Granted, there are a few islands, here and there, that are cordoned off as sanctuaries or preserves, such as Cumberland Island, to the South of us.  You may be able to visit such spots, if you have the money.  But you can't stay.  And you can't drive there.

So, weirdly enough, housing on this island is rather inexpensive, compared to other island communities.  Granted, we have land-leases, not fee-simple lots, but in the greater scheme of things, an 80-year lease is akin to owning the land, particularly when the Authority renews the leases routinely.

But quiet is the thing I think most people here treasure most.  And it is the one thing many visitors just don't get.

For example, we occasionally get a group of bikers that come to the island, mostly out of curiosity.  They grouse about paying $5 each, to get on the island (that fee keeps out a lot of people!) and then when they ride around, well, there is no one to look at them!  They have their straight pipes and ape-hanger bars and their outlaw biker looks, and they ride around, hoping to impress a bunch of people and....

... well, there are no people to impress!  You can drive around here for an hour and not see another human being.  They make one loop of the island and usually leave and never come back.  What's the point of doing wheelies if no one will watch?   What's the point of gunning your straight pipes if there are no "citizens" to annoy?  The "Look at me, Dammit!" crowd gets mightily frustrated here.  We have no commercial strip, no places to "hang out" no places to "cruise".    Just miles of endless deserted beaches, and deep maritime forests.  Whether it is a loud obnoxious bike, a fancy car, or an off-road Jeep with big noisy tires, no one here really gives a damn, if they notice you at all.  And the sort of person who buys junk like that does so, so that people will look at them.  Even negative attention is, after all, attention.  But no attention at all?  They hate that!

So it stays pretty quiet here.  And the culture of belligerence has yet to take hold much.

But quiet is hard to get used to.  And a lot of folks from the big city don't like it here, and leave after a year or two.  They want the noise, the traffic, the McDonald's drive-through and a Starbucks and a Wal-Mart.  They want traffic and stoplights and intersections (we have five stop signs, no stop lights).  They want to be with people, immersed in people, surrounded by people.  They want noise to drown out the deafening silence in their lives.  They need people to impress with their status and to reflect their values.  Quiet is threatening to them - they are no normative cues to focus on.

And once you live in quiet, it is very hard to go back to noise.  I find it hard to drive in traffic now, as people's actions make no sense.  Everyone seems to be in such a freaking hurry, once you get into town or the city, or even on the Interstate.  And in a crowd, well, I am not such a big fan of crowds anymore, which is probably one reason I didn't enjoy our last cruise - people pushing and shoving and brushing up against you, with no sense of personal space.

It is funny, though.  People say, "Why would you want to live there?" and I want to say back to them, "Why would you want to live in some God-forsaken mini-mansion development in a suburb that is gridlocked with crowded streets, fast-food outlets and big-box stores?"

And yet, many people choose and prefer the latter.  Perhaps I was not raised as part of the hive mind.

Fighting Depression Through Self-Actualization

When a monkey can manipulate his environment, he is less depressed.

Recently, I finished some home repairs that I had been putting off.  And finishing these small projects made me very happy - literally ecstatic.  Being able to manipulate your environment and see a result is one sure way to fight depression.

In my case, the project was our laundry room.  Poorly laid out by the previous owner, the washer and dryer were arranged in a dust-collecting corner.  The laundry sink wasn't bolted to anything and wobbled whenever you used it.  Worse yet, it leaked.

I pulled it all apart, cleaned everything, and then rearranged the washer and dryer side-by-side, eliminating the wasted corner.  And I installed a melamine shelf above the back of the washer/dryer so old socks would be less likely to "fall down behind."  It also made a good place to put those giant jugs of liquid soap.

I bolted the damn laundry sink to the wall and re-worked the drain pipe properly, with new pieces and seals.  When I got done with it all, it was clean and neat and easy to use.  But more importantly, I was happy, too, after it was completed.

Being able to manipulate your environment is important in maintaining mental health.  People who feel powerless, passive, and not in control, tend to get depressed.

When I was a lad, we had those Time-Life books about the human body.  The scariest of these was the one about the human mind.  I remember one photo in the book was about a crazy lady getting her hair cut.  The caption mentioned that even changing a hairstyle can help a person improve their self-esteem and fight depression.  And it is true, even small things like that can trigger self-empowerment - the idea that you can control and manipulate your environment.

And this is critical to happy living.  As I noted in an earlier post, Learned Helplessness, when an organism believes that nothing they can do can affect their environment, they simply roll over and whimper in a corner and become depressed.  On the other hand, when an organism realizes that its actions have a direct effect on their outcomes, they become more emboldened, happy, well-adjusted, and successful.

Unfortunately, today, many of us end up the former, through our passive lifestyle - both physically and mentally.  Most Americans work at jobs where what they do doesn't seem to affect the outcome of anything very much.  In many cases, our jobs are so specialized that what we do does not appear to contribute to the overall product or project very much.

Then, at the end of the day, we drive home, in traffic, where our actions are hemmed in by the actions of thousands of other motorists, and often, we are stuck in traffic with no way out, other than to wait.  It is passive, it is frustrating, it is depressing.  We are no longer in control of our own cars - or our own destinies.

Then we get home and flop down in front of the TeeVee and watch the average of 4.6 hours a night of it (I don't watch any, so your typical TeeVee watcher ends up watching more).  They eat some prepared meal or send out for pizza, and then lament about their weight.  Nothing they seem to do will make that extra pounds go away!

And their finances are in ruin as well - nothing they can seem to do will get them out of that "paycheck to paycheck" rut.  And it is a rut - a form of depression.  And not surprisingly, a lot of Americans are in that rut and a staggering number (about 10%) are on anti-depressants.

How do you fight this trend?  By manipulating your environment, any way you can.  If you find yourself depressed, think about your life and how much control you feel you have over it.  And if you feel hemmed in by life, then make changes.  Often, depression is your mind's way of saying that you are unhappy with your situation not yourself.

Even small things can make a big difference, which is one reason why many people have hobbies.  If you make ceramics, paint a painting, fix up and old car, do woodworking, arrange flowers, gardening, or whatever, it gives you the chance to build something with your hands - and demonstrate to your mind that you can alter your environment.

And often, hobbyists end up giving away or selling what they make - as it is the making of the thing that gives them pleasure.   If you read the Experimental Aircraft Association (EAA) publications, you read, time and time again, about people who build their own airplanes, only to sell them when completed and start on another one.  They are less interested in the flying experience as they are in the building experience.  And nothing says "manipulate your environment" than building a machine in your workshop that can actually fly.

We recently completed a small house on our property - a studio for pottery.    And putting it up was the fun part.  You saw, on a daily basis, your environment changing in response to your inputs.  In 14 days, we had the entire shell erected and sided.  From then on, it took months and months of work to finish the inside, insulate, sheet rock, wire, trim, and finish.  Finish work is tedious and time-consuming, compared to framing.  And it seems that you spend hours cutting one damn board and the overall effect isn't squat.

And this is one reason why a lot of people get home improvement projects about 7/8ths done and then stop.  They get used to living in a construction site, and the project is never completed until the day before the house is sold (but more on that in another post).

And the same is true of hoarding, or living in squalor.  People see no point in "cleaning up" the house, as nothing every changes, so they instead get used to living in a pile of junk, and think that nothing they can do will change it, because it is all so much work, to sort through the junk (because it might be valuable!).  On the other hand, nothing says "happy" like a dumpster in the driveway and a shovel to fill it with.  Unfortunately, we have created a crime in this country, of throwing things away - aided and abetted by the Mafia in the trash business, who have convinced us that there is a shortage of places to put our garbage (but nevertheless, will find a place to put it, if you pay them enough money).

Passive, Helpless, Actions which lead to Depression

Watching Television
Eating in a Restaurant (especially a chain restaurant)
Eating prepared meals
Stuck in traffic
Tedious, repetitive job
Living in squalor
Sitting Around

Self-actualizing, Manipulation actions that fight Depression

Doing things
Cooking your own meals
Exploring by car
Creative work
Cleaning up the house
Working on a Hobby

And it is no mere coincidence that the actions which tend to make us happy are actions that also are important survival skills.  The hairless ape that sits around and mopes and lives in its own filth, is more likely to be the one that starves to death or dies of disease.  The smart monkey who takes charge of their life, and takes action, ends up happier, healthier, and living longer.  Our brains are programmed this way, by eons of experience and survival.

Be a happy monkey!

Wednesday, December 28, 2011

2012 the end for Sears? We'll see....

What is taking so long for Sears/Kmart to die?

Companies take a long time to die.  About a year ago, I wrote about Sears/Kmart and wondered what the heck was keeping the place in business.  The stores are old, disheveled, and the prices anything but good.  And the foot traffic was pretty dismal.

In Ithaca, New York, there is a Sears, a Kmart, and a Wal-Mart, as well as a Target.  Guess which parking lots are full, and which are empty?  There are maybe a dozen cars at the KMart, and not many more at the Sears.  The Wal-Mart is full to overflowing.  It is hard to find a place to park at Target.

How the heck does Sears/Kmart stay in business?  I thought that at the time, and thought for sure they would go belly up in no time.  Another year passes, and Sears/Kmart continues to bleed to death slowly.  Analysts are calling 2012 as the year they die.  Could be.  Might take longer.

It takes a long time for a company to die.  Sometimes decades.  I wrote before of the antics I saw going on at GM.  Salary employees milking the place for every possible dime.   Hourly workers who showed up for work and slept all day in the can - if they weren't dealing drugs or running numbers.  And cars like the Vega, the Citation, and other automotive excrement, coming off the end of the line, often not in running order - or not for long.

Any rational person would look at that place - in 1980 - and think it would be bankrupt in a few years.  But it takes a long time for a large organization to totter, and then topple.  And when the end comes, it appears sudden, even though the warning signs were there for decades.  GM's problems were endemic since the 1960's, and John Delorean wrote of them back in 1978.  But no one listened to him, and his arrest on drug charges allowed folks to dismiss him as a kook.

Sears has the same problems as GM.  It is selling the equivalent of a 1973 Caprice Classic.  Obsolete, rusty, and poor on gas.  Garanimals and Tuffskin jeans have given way to a line of designer clothes by the Kardashian (sp?) sisters.  Who these people are, I do not know, but I am told, over and over again, by the media, that I should care.  Apparently I am not the only one not to care - their clothing line is selling like lead balloons.

And, like GM, Sears has a huge underfunded obligation in terms of pension and health care for retirees.   And they have an enormous physical plant, in the form of decaying stores, that is more of a liability than an asset.

Perhaps the good news for Sears/Kmart is that they are finally closing stores - and most likely because their lease obligations are up.  In the past, while a store might have been losing money, it was still cheaper to keep it open, as the cost of paying the lease on an empty store would represent a greater loss than the cost of running a money-losing store.  This might explain the stores in Ithaca.

But either their lease obligations are up, or they are losing so much now that it is cheaper to shut down stores.  Either way, it is not a good sign.

Of course, if they had closed down stores and refocused the brand earlier on, perhaps that could have saved the company.  And in an era of online catalog shopping, they decided to cut out their catalog - an odd move.  Their attempts to integrate internet shopping with the network of stores flopped.  Going online to buy and then driving to the mall to pick something up isn't convenient - it is the worst of both worlds.

Maybe Sears has a secret plan to make a comeback.  But I doubt it.  And it is a shame, too, as the retirees will be the ones hurt in this mess, as they find their retirement pensions cut back if the company goes bankrupt.  And bankruptcy could mean a whole lot more empty retail space out there as well, further depressing that market as well.

But with zero investment in the stores, and a CEO who viewed the company as a "hedge fund" it doesn't seem likely there is a secret plan for a bailout.  They are riding the company all the way down, and at the last minute, will jump off, their past salaries and benefits largely intact.

Unlike GM, I don't see this place emerging from bankruptcy "tanned, rested and ready" to start over again.  And I don't think the American people are in the mood for another government-sponsored bailout - nor is Sears/Kmart "too big to fail."

But time will tell.  A economic recovery in 2012 could keep the place afloat another year - just as cheap gas and profitable SUVs kept GM afloat throughout the 1990's.  You never know.  But long-term, it is hard to see Sears growing out of its problems.

Tuesday, December 27, 2011


 ''We can choose to use our growing knowledge to enslave people in ways never dreamed of before, depersonalizing them, controlling them by means so carefully selected that they will perhaps never be aware of their loss of personhood.''  --Carl Rogers.

The quote above sounds as though it were made today, when in fact, it is from 1961.  Since that time, our society and our technology have advanced, and our media now plugs into our lives on a number of levels.   Controlling people is easier than ever before

Television is not just some off-the-air, three-channel phenomenon, but a 500-channel High Definition brain-programming tool that is hard-wired into nearly every home.  The average American watches 4.6 hours a day of it - most of their non-working, waking hours.

But media saturates our lives further.  Most folks listen to the radio during the morning and evening "Drive Times" when they commute back and forth to work (and most folks can think of no other way to live).

But even at work, or on the way, or in-between, we are assaulted by images from our smart phones, our texting devices, our social networks, our news sites, our instant feeds and messages.

In short, we are "plugged in" to an electronic media machine that was inconceivable in 1961.  And much of this media influences us, in ways we are unwilling to admit to.  Subliminal messages from social networking sites, blog-sites, comments sections on web pages, newsgroups, and the like, can influence the way we think, act, work, and consume.

The Internet promised to be a new frontier, free of the commercialization of television, radio, and the print media.  But instead, it has morphed into a network with only one or two channels, for most users.  Many folks log on to the Internet every day at work, and check their e-mail, and perhaps one or two other sites - a news site, perhaps one sponsored by their e-mail provider, a social networking site, such as Facebook, and perhaps some commerce sites, such as Craigslist, eBay, and Amazon.  And much of this is done on company time (for companies not bright enough to block such sites from employees while at work).

And folks tend to gravitate toward sites that reinforce their own preconceptions.   If you are a far-right, gun rights advocate, your beliefs will be reinforced, not challenged, on a gun-rights website and discussion group.  And most of the "discussion" centers  on calling opponents silly names.  And don't think I am picking on the NRA crowd.  Go to a handgun control site and you will see similar values-reinforcement, and similar name-calling.

Today, more than ever before, we have a whole host of data available to us, at our fingertips, on demand, for anyone to access.  And yet, today, most people seek out only the information they want to hear.  They pre-filter the vastness of the Internet to see and hear what validates their preconceived notions.

And yea, we all do it, to some extent or another.

“The structure and organization of self appears to become more rigid under threats and to relax its boundaries when completely free from threat” (Rogers, 1951).  When someone is presented with ideas contrary to their own world-view, they retract and tighten their hold on their preconceived notions.  Thus, ideas challenging their own norms are shunned.  In an interactive media environment, like the Internet, this leads to the person selecting the media which is least threatening to their world-view.  We have enough bandwidth today, on television, the Internet, or radio, for all possible views or variations of views, to be expressed.

The Liberal watches the Daily Show, reads the Daily Kos or the Huffington Post, and listens to NPR.  Each outlet reinforces their existing beliefs, and like old re-runs on TeeVee, is "comfort food" to the psyche.  Similarly, the conservative watches Fox News, listens to Rush Limbaugh, and blogs on right-wing websites.  Disturbing or opposing views are never seriously analyzed, but rather caricatures of opposing views - views which can be safely considered "moonbat" and disregarded.

Thus, rather than become a medium of open discussion and consensus, the Internet - and our modern media in general - becomes a series of compartments, where people park themselves to listen to their own ideas bounced back at them, over and over again.

Mega-dittos, Rush!

Within these comfort-food enclaves, individuals can be nurtured and fed - and weaned onto more extreme ideas.  Carefully orchestrated "talking points" can be repeated, over and over again, to create a narrative that, within a news cycle or two, you start to believe was your own, original idea.

Ideas are floated like trial balloons.  A few years back, no one really cared about immigration.  Suddenly, it is the number one concern, for many Americans.  Why?  Because a carefully orchestrated campaign told you it was important, that's why.  And before long, you begin to believe that your views on immigration are your own.

I use that as an example.  It could be anything, from Abortion, to Gay Marriage, to the "War on Christmas" - and it makes no difference if you are Left or Right, Conservative or Liberal.  These ideas and positions are sold to you like soap, and you buy them and you have a preferred brand - which you believe you chose and like based on its merits and your personal "tastes".

And many of these ideas are ideas about consumption itself.  Buying things, we are told, is a patriotic duty, in order to help our consumer economy.  If you stop spending, you are being unpatriotic.  And you may think this is silly, but Presidents have said this - as well as Governors and Mayors.  Keep spending to help the economy!  And I have heard this thought echoed on chat rooms or in discussion groups.  "Money was meant to be spent!" one fellow chirps.  Why bother investing?

And so on and so on.   Daily, we are bombarded with messages to consume.   If you watch television or even go on the Internet, you will see ad after ad for cars  - mostly touting monthly payments, rather than overall cost.  We are pushed to consume, rather than build wealth.  And most of this consumption is for things related to status - to show others how successful we are - or think we are.

And of course, the debt industry is right there to help you out - with every transaction.  Want to buy a car?  Finance it, of course!  Buying furniture?  Rent-to-own!  Buying a cheeseburger?  Put it on a Visa card - and get flyer miles!  And of course, you want to participate in the "American Dream of Home Ownership" don't you?  Government-backed mortgages are ready and waiting!

Before long the consumer is spending as much every month on interest payments as they are on actual things they buy - perhaps more.    I know that I was paying about $1600 a month interest last year, between the mortgage and credit cards - almost $1800 a month, the year before then.   If I had car payments, well, the amount would be far higher - perhaps over $2000 a month.

If you factor in taxes and whatnot, the amount of money the average person has to spend on actual things is probably equal to or less than, what they are paying in interest.

Debt becomes a modern-day form of slavery.  Perhaps not slavery in terms of Antebellum days, but slavery nevertheless.  People work hard to give away a third of their earnings in taxes, and then another third to banks in interest charges.  They take home a tiny pittance and think themselves "lucky" because they got a deduction on their interest payments.

In the abstract, it is an interesting scenario, and one wonders how we managed to sell ourselves - or be sold on - this idea.

But fortunately, there is a way out.  While we can't prevent ourselves from being manipulated by the media and the powers-that-be all of the time, we can unplug from the media, stop insisting on being "up to the minute" on news all the time, and also unplug from consumerism.  The less you are listening to (and watching) these poor normative cues the easier it is to think for yourself - to think things through, away from the din and distraction of the modern world.

And yet, so many of us do the opposite.  We are drawn to the flickering glow of the Cathode Ray Tube (or today, the flat panel display) like moths to the flame.

You know, that usually doesn't end well for the moth.

The Only Weapon You Have....

In the battle of the marketplace, the only weapon you have is the dollar in your hand to spend.  And often the best and most effective use of this weapon is to simply not deploy it.  The other side has to fight to win.  You win by staying home and not engaging at all.

For the average American, doing battle with our economic system (and it is a battle - the marketplace is a battlefield, not a place to play patty-cake) there are not a lot of weapons in your arsenal, with which to do battle.

Yet, the battlefield is tilted in your favor, even though you don't realize it.  Retailers have to sell product to stay alive.  However, your level of consumption is variable.   And when people don't consume, retailers lose, and lose big time.  On the other hand, if you convince yourself that you "have to have" some product, well, you basically throw up your hands in surrender.

For most of us all of us, our incomes are basically finite.  You can get a higher paying job, if you can increase your educational level.   You might get a promotion.  But for the most part, particularly when your career path has reached its apogee, in your middle 50's, you can pretty much figure out how much you will make, over your lifetime.

And this is true for Billionaires as it is for paupers.  You only have so much you will earn.  We cannot simply will more money into our lives, try as we might.  We can only work so much, earn so much.

So that means your only weapon is in how you spend your income.

That's it.  And it is a crude weapon, but there you have it.

And yet, most people immediately shoot off every round of ammo they have - and then borrow more.

When you spend ever last dollar you have, you leave yourself powerless.  And when you are powerless, you can be taken by the enemy and kept as a POW.

Borrowing money, particularly for stupid things like consumer goods, just means that you have less money to spend.  If you have to pay $1 in interest for every $10 you borrow, that is $1 less you have in your pocket.

Trying to accumulate wealth through savings is very hard to do.  And realistically, for the very poor, accumulating any significant wealth is going to be near impossible to do.

But the very poor often end up squandering what little income they have by borrowing money - often on the worst terms and at the highest interest rates - through pawn loans, title loans, payday loans, and other schemes.

Perhaps, if you are very poor, saving money is out of the question.  But at least you could stop borrowing it!

It seems axiomatic that if you are paying interest on borrowed money that you end up with less money in your hands.  Pay 10% in interest and you only have 90% left.

How you spend your money is how you compete in the marketplace.  Money represents power, and whether you accumulate power and wield it wisely, or squander power is up to you.  But you do have choices - right in your wallet.

Sunday, December 25, 2011

My Christmas Tradition -

Everyone has Christmas Traditions.  Mine is to run my credit report.  Let's face it, everything is closed anyway, what are you going to do all day? is the only REALLY FREE annual credit report, as required by law.

Don't be confused by similar sounding sites or sites that advertise on Google as "free credit reports" - they want a fee, and fee ain't free, is it?

Why do an annual credit report?  Well, some things can appear on your credit report that are inaccurate, wrong, or just bizarre.  Even if you don't need to borrow money, it helps to have accurate information.   Credit reports are used for employment, renting, whatever these days.

This year I found two items that were wrong:

1.  A Radio Shack credit card account closed years ago (they gave away free batteries) that was showing open on transunion.  I was able to "dispute" this with a single click ("account closed by consumer").

2.  An address for "XXXXX, OK" (literally) that was obviously typed in by someone seeking my credit status, appearing on Experion.  Again, a one-click dispute ("not my address") was easy to do.

It is lovely to see all those "accounts paid, up to date, closed by consumer, balance $0" for the first time in my life.

Of course, the does not give your credit score.   But obessing about credit scores is for chumpsters - poor people who think it is a privilege to be allowed to borrow money.  If you pay your bills on time and do not have excessive debts, your credit score will be in the rock star range.

If you are having trouble getting loans at good rates due to your credit score, look at this as a Sign From God that you need to stop borrowing money and to try to live within your means.

For the most part, the system works flawlessly.  They do ask you "security questions" to verify your account.  Some of them are just wrong questions - to test you.  For example, "you took out a mortgage in May of 2008 with the following companies:" and the correct answer is "NONE."  Then they ask you for the amount of the nonexistant mortgage, and again the answer is "NONE."

For the second year in a row, Equifax would not display Mark's Credit report, so I would have to MAIL in a request tomorrow for that one.  But funny thing, I tried it again, an hour later, and it worked fine.  So I have all three reports for both of us, and they look just fine.

Some folks say you should "game" your credit score by leaving your oldest account open to show a longer credit history.  Perhaps this may help if you have marginal credit.  But having no debt - and no need for debt - is a far better plan, I think.

Plus, open accounts are opportunities for fraud and error.  No one can charge to your closed account!

Bu what about FREEZING your credit history and report?

That is the subject for my next posting.

It's the Most Wonderful Time of the Year!

It really isn't the Most Wonderful Time of the Year.  And I believe that solstice holidays were invented to cheer people up at this depressing time of year.  Unfortunately, they are so hyped nowadays that they have the reverse effect - making people even more depressed!

It's Christmas, and you are supposed to be happy.  Not just content, but, according to the media, having the equivalent of 200 orgasms all at once.  Christmas is supposed to be like that - plus the Fourth of July and V-E day thrown in.  And it if it ain't like that for you, well then there's something wrong with you, buddy!

Because, as Fox News constantly reminds us, there is nothing - nothing - wrong with Christmas and donchooforgetit!

But the reality is this:  The winter solstice, with its shorter and shorter days, is a very depressing time of year.  Lack of light can cause depression.  Cold weather is no fun, without enough snow to ski on.  December, without Christmas, sucks.  And that is why, I think our ancestors came up with Solstice-based holidays - to cheer up an otherwise dreary time of year.

But of course, in the thousands of years since the first Druid dragged a shub into his hovel and decorated it, we have taken it all a little too far.  And Christmas can no longer live up to the hype.  And as a result, people get depressed.

Relax.  There is nothing wrong with you.  You are perfectly normal.  It is just the weirdest time of year.

And for many folks, it can be doubly stressful for a number of reasons.  For example, Mark's Mother died when he was age 13, right before Christmas.  In a snowbound house in rural Maine (Note to self: never live there!) she had a heart attack.  And since the local ambulance couldn't make it, they had to sit there and watch her die.

And yea, that sort of thing messes with your head.  Christmas is a mixed blessing for folks like that.  And given the number of holiday parties this time of year, it is not surprising that many folks lose loved ones to drunk drivers and the like.  So this time of year has emotional baggage for many people, and the contrast of personal tragedy with the Disney-On-Steroids promotional aspect of the holiday can be jarring.  Everyone is Happy! Happy! Happy! - except of course, you.

Others may have bad memories about Christmas due to the nature of their families.  We are all told - in fact ordered - to go see our families at the holidays.  And we are all told we will have a Norman Rockwell moment with them.  But for many folks, it is anything but.  Families are very odd, and many parents, siblings, or other relatives choose the holidays to use as a platform to run down their children or make them miserable.  The "Airing of the Grievances" is not just a Festivus event.

For others, the problems with Christmas can be more prosaic.  For most of us, it simply does not live up to the hype.  It is an OK holiday, and you have fun.  But once you've gotten than shiny new bike at age 8, it is all downhill from there.  And after 50 repetitions of the holiday, it gets boring.

And that's OK and not to be unexpected.  If you have kids or grandkids, your enthusiasm may be rekindled, briefly.

But if Christmas doesn't seem to be living up to the hype, well, relax!  There is nothing wrong with you, but rather the merchandising media army that has been hyping the holiday since early November.  Every story, every song, every tradition has hammered into your head, over and over again, how freaking happy you are supposed to be.   There is no way any holiday can possibly live up to this level of hype!

And that is why I think we need to unplug from Christmas a bit - it is time to De-Militarize Christmas, and let it go back to its original, religious roots, and also take its rightful place as a minor Christian holiday, and not the biggest secular holiday of the year.

Maybe then, Christmas can be a time of joy and good cheer, and not crowded shopping malls and airports, harried shoppers and unfulfilled expectations.

But in the meantime, don't sweat it.  Go see a movie and get some take-out Chinese.   And look forward to longer days, more sunlight, and Spring.