Monday, July 30, 2012

Shopping Phone and Internet Plans....Again

Shopping your phone plan is a PITA, but worthwhile to do, now and then.

I am having trouble with my AT&T landline again.  I pay extra every month for call-forwarding-busy/don't answer, and in the last three month, someone at AT&T keeps resetting my call-forwarding number so that my calls don't forward.  This is frustrating, as customers call and if I don't answer or I am busy, they get a recording saying the number is not in service.   This is not good for business.

Are there alternatives to AT&T landlines?  Yes, oddly enough, and one of them is AT&T fiber optic.

Shopping phone plans, as well as cable, internet, and wireless, is hard to do, as the actual cost is obfuscated and pricing is anything but transparent.  If you go onto any service provider website, there are alarmingly low prices proffered, such as $29.99 a month!!! (with exclamation points).   But the catch is, of course, that (a) that is a six-month or 12-month promotional price, and (b) there are taxes and user fees added on, and of course, they can't tell you how much that will be.

Funny thing, but the airline industry tried that second tactic for years.  Finally, the government stepped in and said "prices are prices - POST YOUR ACTUAL PRICE!"    I just bought four round-trip tickets to Spain, and let me tell you, it was refreshing to be able to compare ACTUAL PRICES for a change and when I clicked on BUY NOW, the amount charged to my card was the amount on the screen.

Still think government regulation is a bad idea?   Some airlines, such as Spirit, Southwest, and Allegiant, thought so, and sued.  They Lost.   I suggest you boycott those airlines, as they likely are not providing really good deals anyway, if they have to resort to trickery to get you to buy a ticket (U.S. Airways seems to have the lowest prices of all the major carriers, consistently).

(of course, the air carriers did not sit on their hands.  There are now "a la carte" charges for everything from checking bags, to carry ons, to the "free" drinks, to even using a barf bag.  Pretty soon there will be a fee for having to breath other people's farts on the plane.   Classic marketing - take a flaw in a product and sell it as an add-on extra price "feature".)

So shopping and cross-shopping these plans is more nightmarish than going to a car dealer and saying "how much is this car?"   The price is an irrational number, and no two people seem to pay the same price, it seems.

I called Comcast, and the young lady answering the phone was actually helpful.  It took some prodding to get her out of her script.   The script says to sell the promotional pricing and that "we can't calculate the taxes and other fees".    The latter is, of course, bullshit, as their computers calculate these fees, every month, when they send out a bill to you.  The idea that they can't tell you the taxes and fees up-front is ridiculous.

On their website, they offer a number of "bundles" of services, including telephone, cable TV, and internet access, starting at $99 a month, but only for the first 12 months.  And these bundles do not include the various access charges, fees and taxes.   So, in other words, it will cost more - a whole lot more - to have these services.

How much more?  The regular price, for Cable TV, Landline Phone, and Internet Access, would be $155 a month, with  a $90 installation fee the first month.  This is including all the taxes and fees, which the operator was able to calculate for me.

I told her I didn't want cable, and she recalculated this to $110.90 a month.   This is about $30 more a month I am paying for twisted pair copper POTS (Plain Old Telephone Service) and DSL modem (which runs about $83 a month).  However, it would be a feature upgrade for the phone and a dramatic speed increase for the modem (although we currently are happy with our current speed, which will stream movies on Netflix).

(Incidentally, comparing network speeds for DSL, Cable, and fiber optic is problematic.  Each has its own advantages and disadvantages. Cable can be 5 times faster than DSL, provided your neighbors are not on it.  Cable is more like a party line, not a switched circuit, so you "share" bandwidth sometimes.  And of course, for all such services, the actual data rate is usually less than the posted numbers.  e.g., 3.0 Mbps works out to about 2.8 Mbps.  Still enough to stream movies, though.)

Comcast was an interesting option, but costing more is costing more, and $90 to install and $30 every month, adds up to $450 the first year, and $360 every year thereafter.  Now, again, this is the regular pricing, not the come-on "bundle" price that is only good for one year.

Also, the basic cable modem has no router or wireless, so I would have to take my old Cisco out of retirement and configure that.  A combined Modem/router is $100 extra on the install.

Again, you have to disregard the "bundle" pricing, as while it is a discount, it is only a temporal discount.   They are playing the classic game of getting you to think in terms of monthly costs, and not overall costs, and to think short-term and not long-term.   And unless you want to switch service providers every year (which may be one way of playing the game, I suppose) the savings are not real for the long-term.

AT&T has two options, traditional "twisted pair" regulated utility landline phone service, that is the same phone service you grandparents had.  They are also offering, in some areas, AT&T "Uverse" fiber-optic-to-pole service, which we have here on the island.  The fiber optic service, apparently not being part of a regulated utility, is not taxed the same as the land-line (according to the sales rep, consider the source).  Currently I pay about $69 a month for phone and DSL, which with taxes morphs into $83 every month, like clockwork.

Could I save on this Uverse thing?  Maybe.  Maybe not.  Again, the fellow (who, ironically, was from the repair center - they must be on commission) tries to sell me on the "bundle discount pricing" and won't talk about how much the taxes and fees are, other than they are "less" than the fees and taxes for the regular phone line.

The prices are startling low on the bundles.  He is telling me $59.95 a month for six months or a year.  Yea, yea, yea,  what is the REAL price?   He claims it is $78 plus the unknown taxes.  Their website offers startlingly low prices of $29.95 (yea, right).  So, I figure I'd better call the sales office.

The problem with AT&T is compartmentalization.  Every department has a keyhole view of the world, and people you talk to cannot tell you anything about anything outside their narrow world view (wireless, internet, landline, uverse, long distance, calling card, repair, sales, main office, GoPhone, whatever).  And each has a separate 1-800 number to call, and you usually get transferred to a number of different people, several times, and are put on musical hold, several times.  It is frustrating.

So, after talking to a robot, going through a DTMF tree and being put on hold several times and listening to musical hold, I get through to an operator.   (You cannot get real pricing on the Internet and thus you have to call to get any real pricing information.)  AT&T Customer service is very poor.  Not that the people who answer the phone are bad (well, some are) but that you cannot get ahold of anyone without being on hold for so long that by the time you talk to someone, you are at wits end.

I finally get a nice young man from South Florida, named Tristian, who says he can switch me to Uverse service for $83 a month, including taxes.  He claims the phone service, which includes unlimited long distance in the USA and Canada, call forwarding and voicemail, is a flat $35 a month plus sales taxes, with no FCC fees.  The 6 Mbps fiber optic service is $43 a month as well.  These are the actual prices, not the "bundle" prices.  Total, with taxes, is about $83 a month, which is, oddly enough, what I am paying now.  Installation charges are waived and the $100 modem/router has a $100 rebate.

I ask him about the come-on pricing.  He says that as an existing AT&T customer, I do not qualify for the "bundle" pricing, but only the regular price.  The "bundles" are only for "conquest" customers only.

I mentioned to him that it would make sense, therefore, to switch to Comcast for a year, use their "bundle" pricing, and then switch back to AT&T as a "conquest" customer and do this switch every year.   He mentioned that a lot of people actually do that.   Sounds to me like the telcos are chasing their tales here - their bundle discounts encourage account churn.

When I return from vacation, I will investigate this further.  I would be interested to hear from others as to how they work this.  And please, no gushing endorsements about "$59.95 a month bundle plans!"   If you are going to post a comment, drop your drawers, get out a measuring stick, and let us know the real deal - the ACTUAL COST, with taxes, tags, and title.

Frankly, I think a similar regulation to the airline industry is needed in the telcom industry.  People should be able to shop on cost, without jumping through a lot of hoops.  It makes no sense, other than to marketers, to have prices that are obtuse, opaque, and impossible to determine - until you get the bill.

It this important?  Yes, it is.  Paying $100 a month for telecommunications is an obscene amount, and something that "bugs me" every month when I pay the bill.   Most people pay more - far more - for bundles of cable, phone, internet, and wireless - $200 a month or more.   The minute you stop letting stuff like this piss you off is the minute you start to slide toward inevitable bankruptcy.

And most people lie to themselves and others about the actual cost.  When it comes to things like gas mileage, penis size, or your cable or wireless bill, most people lie through their teeth.  I am not sure why, as they are only lying to themselves.

* * *

I am not sure that obfuscating prices really saves the telcos and cable companies money.  When you have to "call for price" it is a sign of a bad deal, usually.  And those calls cost them money as they have to pay operators to tell people what the real price actually would be.

A regulation would actually help these companies, as they could publish real prices online.  When your competitor snags half your customers with a come-on "bundle" price (because consumers are stupid) then your only choice in life is to do the same - put up fake prices and screw your own customer base.

Sometimes, a marketplace cries out for regulations - a neat and easily enforceable set of rules that everyone plays by, to compete on the merits, not trickery.

Horatio Alger Stories

Horatio Alger Stories were characterized as "rags to riches" stories.  Some folks claim they are a myth - that you can't leave the social strata you are born in.  Is this true, and is it true today?

Horatio Alger wrote a number of stories for young men, around the turn of the last Century.  The plots of the stories, varied, but inevitably, the protagonist, usually a young man ("Ragged Dick" being the first of the lot) ends up, by virtue of thrift, hard work, and clean living, to get ahead in the world.

Many folks laugh at these stories today, and argue that they sold a false set of expectations - that it was impossible back then - and even today - to move up from ones social class or caste, by mere hard work or thrift.

But of course, this is not true, on a number of levels.  First of all, many, if not all, of the Alger stories were not "rags to riches" stories, but more "rags to middle-class" stories, where young men, though hard work and thrift, end up doing well in life, if not exactly living like Montgomery Burns.

The popular stereotype of the Alger story exaggerates the outcome, in an attempt, I think, to discredit it.  By making the stories sound ludicrous or improbable, they can be more easily dismissed.  You can't become the next Bill Gates merely by working hard and saving money, they argue, so you might as well not bother even trying.  This is, of course, flawed thinking - weak thinking - at its worst.

Moreover, some of the stories really were not about working hard and saving money, but were more along the lines of Dickens' Great Expectations, where young Pip succeeds by virtue of a mysterious benefactor.   Actually, if you read Dickens' stories, they are all pretty creepy.  Young boys go off to London and end up being aided by the help of wealthier, older men.   Oliver Twist falls along these lines, for example.    Creepy.

But getting back to Alger, were his stories unrealistic back then - or even today?  I think not, and let me tell you why.

As I have noted time and again, the point of this blog is not how to get-rich-quick, or even get "rich" at all, but how to become comfortably middle-class (which ain't so bad) in an era where the middle-class has seem to have lost its way - drowning in a sea of debt to have cars, smart phones, cable TV, and granite counter-tops.

It is possible to improve your lot in life, no matter what level of the social and economic strata you come from, if you use a little hard work and thrift.

On the other hand, just saying, "fuck it, why bother trying?" and then smoking pot or crack and taking out payday loans, is one sure way to race to the bottom - again at any social level.   For middle-class people, the road to the poorhouse is paved with new-car payments, cable TV bills, and smart-phone plans.

Failing to save is the first way to fall down the economic ladder.  The next rung is debt, following closely by owning things and subscription services.  Spending more than you make - or most all of what you make - to have "stuff" and electronic subscriptions, ends up making you a little poorer all the time.

On the other hand, if you can figure out what you really want out of life - and live with less of these things - you can accumulate wealth and become wealthier.

And this is not an option for the middle-class today.   We have to save for our retirement through a 401(k) plan.  And in order to have a $40,000 income from our 401(k) we would need to save a million dollars by retirement.   And yet, few have.   Most middle-class people I know are living for today, have not saved for tomorrow, and look down their noses at me because I don't have cable TV, a new smart phone, or a leased Acura.

They are making a choice that ordinarily, or at least in the past, only people in the poor ghettos made - living for today, without thinking of tomorrow.   The very poor tend to do this - squander money on drugs and alcohol, and spend very unwisely (using check-cashing stores, for example).   This is to be expected of the poor - that is why they are poor.  It is disturbing when "live for today" becomes the mantra of the middle class.

But there is another reason the Horatio Alger story is not a myth.  And that reason is simple:  There are people, who, through thrift, hard work, and dedication, have improved their status and stature in life, far beyond that of their parents and ancestors.   And chances are, you may know some of these people, and in fact, they may be in your family.

For example, I wrote before about my Grandfather, Platt Kissam Wiggins.  His Father, according to my Mother, had killed himself, which was quite a scandal back in turn-of-the-Century America.  His family came from Brooklyn, when it was originally farm land.   The family homestead had been sold off and the family fell on hard times.   His Mother, now a widow, struggled to support the family by cleverly buying and selling second mortgages.  She survived and was able to put her children through college.

Platt went to City College and then to Law School.  He got a job with a Brooklyn firm (still in existence today, albeit a Real Estate Firm) that represented The National City Bank of New York (today, Citibank).  He rose rapidly in the firm, and moved to Larchmont, New York, and was later elected Mayor of that City - and became Partner in the firm shortly thereafter.  A long-time Democrat and New-Dealer, he was also head of the banking section of the New York State Bar and was involved in establishing many of the banking regulations that were promulgated during the Great Depression (laws which were repealed about a decade ago, with predictable consequences).  Oddly enough, a former Citibank head now calls for these laws to be reinstated.

So, right there in my family, in the not-too-recent past, is an example of a "rags to middle-class" story.  And I don't have to look too much further to find another.  My Father, for example, came from a fairly lower-middle-class family in New Jersey.    His Mother's family started out as servants on the Steinway Estate on Long Island, and saved up enough to buy a farm in Little Silver.   The next generation, however, was content to sell off this land for building lots and live off the proceeds.   His Father's family had a vague background, the family roots being lost in the fog of the Irish and Scotch immigration of the 1800's.

His Dad was an alcoholic and by all accounts a cruel man.  What little money he came into, he spent lavishly - living for the moment.  He was partnered with his brothers in a Buick dealership (no relation to the present-day one by the same name) and they apparently threw him out.  He re-entered the Army, having no other job offers.  He died of lung cancer in his 50's, nearly penniless, leaving his widow to eke out a living for the next 40 years as a school teacher (back when school teachers made bubkis).

But he wanted my Dad to go on to better things, and Dad went to college, which was interrupted by the war, and eventually graduated from MIT.  He had a bit of a shaky start, but managed to get some good jobs in management, and, over the years, work his way up the corporate ladder, albeit with the occasional setback.   While he never "struck it rich" as I think he hoped to do (his dream, he once told me, was to be President of a company and have a Lincoln Continental) he ended up not doing too badly (V.P. and a Mercury Marquis).  He retired comfortably middle-class, unlike his Dad.  Social mobility is possible.

Of course, there are others in my family - from the present generation to generations back, who were socially mobile in the other direction, often squandering educations and money, due to alcoholism and drug use - or simple laziness or the desire to "have it all, now!"  It is tempting, and we all are prone to this tendency now and then - the desire to spend, rather than save, and the willingness to engage in weak thinking now and again.

But outside my family, I also know examples of other folks who did the "rags to middle class" deal - sometimes upper-middle-class.  The professions have always been a good vehicle for this, although in recent years, being a Doctor or a Lawyer isn't as good-paying a job as it used to be.  But many of my bosses in the legal profession came from very poor backgrounds and yet rose to the top of their firms.

One boss of mine, a nice Italian fellow and an excellent lawyer, grew up in Old Greenwich, Connecticut, as I did.  While I was the son of a young executive who took the train into the city every day to work, he lived over his parents' Italian grocery store.  Needless to say, we were in different social castes and classes.  But again, he applied himself and went to college in law school, and 30 years later, the son of Italian immigrants is a partner in his own law firm.  Social Mobility is possible.

In fact, not only is social mobility possible it is inevitable.  As I have alluded to in other posts, many of my friends from "rich" families ended up being downwardly mobile rather than upwardly.  And much of this has to do with being raised with money (being given it, instead of earning it) and also simple mathematics. 

For example, Andrew Carnegie makes millions of dollars.  He gives a big chunk to his family, who builds ludicrous mansions on an abandoned island off the coast of Georgia.  Their children each inherit fractional shares of this money.  Their children receive even smaller shares.  Within a few generations, a family fortune fizzles and dies out.  Maybe, somewhere along the line a young scion picks up the torch of his forebearers and uses some of the remaining dough to start back up again.   But not often.

So, if so many of the very wealthy end up falling down the economic ladder over time - who takes up the slack?   Well, new people come along and become the new generation of wealth in this country.  And wealth is very dynamic in this country, over time.  Each generation has its own share of the wealthy social set.  And in a generation or two, that set is pretty much gone.

The old Dutch families from New York, that Louis Auchincloss wrote about, were already losing their wealth (but not yet their social position) by the turn of the 19th Century.   By the 20th, new wealth, in the form of industrialists.  The Magnificent Ambersons is another example of a story that follows this social development.

But since then, even that wealth has moved on.  There are no Steel Barons anymore, except in Ayn Rand books.  And while Joseph Kennedy may have made billions in the stock market, no one really gives a rat's ass about the Kennedy family, since Teddy died.  The remaining relatives and hangers-on are a pathetic shadow of the original dynasty.  Within another generation, they will be all but forgettable.  ("Really, you are related to John F. Kennedy?  How fascinating!  Yawn!").

Wealth in this country is more Dynamic than Dynastic, which is one reason I don't spend too much time worrying about the very wealthy (although I have little sympathy for them, either) and concentrate on my own business.

And that is the problem, again.  That weak thinking bugaboo.  People hear that Mitt Romney makes $22 million a year and think, "shit, I'd be lucky to save up one million in my lifetime" and just give up on trying, or call for "redistributing the wealth" as an answer to their personal problems.  A better approach is, I think, to realize which candidate is best aligned with your goals and needs, and to me, a guy like Romney really doesn't "connect" with the median American making $51,000 a year.

But again, the fact that a small few make so very much is no reason to simply give up.  You can improve your lot in life, but it does take hard work, thrift, and a little luck, to get ahead.  Horatio Alger was not wrong - but the parodied and exaggerated version of Horatio Alger perhaps is. 

No, you won't be the next Bill Gates by saving money in your 401(k).  But trust me when I say that when you turn 60, you'll be glad you put money into that account.   You can "get ahead" in our society, but it does require some work, and some sacrifices.

Many folks choose not to sacrifice.  They prefer to spend $150 a month on Cable TV or a smart phone.  They prefer to lease new cars and eat out in restaurants five nights a week.  They prefer to buy things on credit cards - and not worry about "carrying a balance".

These are choices - and choices that a lot of people make, perhaps most.  The protagonists in the Horatio Alger stories get ahead simply by making different choices.   And that is as true today as it was back then.

Saturday, July 28, 2012

Another Day, another Mass Shooting

The media loves tragedy stories.  And mass-shootings are big business for the media.

People like to beat up America.  And nothing gives them ample opportunity than when some nut-job goes off and shoots a bunch of people. Our European friends lecture us on our "gun culture" and "culture of violence" even as they lap up our explosion movies.

But America has not cornered the market in nut-jobs, although we seem to do a good job of creating them.  Europe and even Japan, have had their share of people going nuts and killing folks. It is just that, among other things, those countries are smaller and thus the number of nut-jobs is proportionally smaller as well.

You remember the Norwegian nutjob who, very recently, gunned down 77 kids at a summer camp on an island.  He had that same creepy smile as the guy they just caught in Denver.  What is it with these people?  Do they go to the same photographer for their creepy head shots?

(Actually, if you look at these folks, they all do seem to have the same disturbing look on their face.  I wonder if some facial recognition software could be programmed to pick out psychopaths in a crowd.  I'll have to Patent that!)

Even our British friends, who claim to own no guns at all, have had a School Shooter, who mercilessly gunned down little kids.

So craziness is not something we have Patented.  Granted, our level of crazy per capita is arguably higher - and it certainly is easier to get guns in this country.  But as the examples in Norway and the U.K., illustrate, crazy people seem to be able to find guns, even when they live in countries with gun control.  And as the Japanese example illustrates, determined deranged people will kill, no matter what.

And of course, with some fertilizer and diesel fuel, you create an awful lot of carnage.

It is sobering to read the Wikipedia list of rampage killings - which is broken out by continent, and also shooting type (grade school, high school, college, workplace, etc.).   The list is rather extensive, multi-cultural, and spans a large period of time.  School shootings, in particular, date back to the 1800's.

But, as you read the list, one thing stands out as the common denominator: Crazy.  The people who do these things are unhinged.  And maybe, if we can't enact gun-control laws, we can enact unhinged-people laws (which would likely round up all the gun owners, predictably).

The media will (and is) engaging in a lot of hand-wringing right now, and in a few days, when the story starts to die down, they will start working the political angles.  And in about a decade, we might actually know what really happened.

Like with the Columbine massacre or Hurricane Katrina, the information you get right after the event is often wrong and often dramatically so.  And no, the nightly nooze never bothers to correct the record.

So even today, there are people who believe that bodies were "stacked up like cordwood" in the "meat lockers" beneath the Superdome.   And no one bothers to ask why the Superdome would have meat lockers underneath it.   The reality is, of course, that never happened.   But the media never bothered to correct it.

Or the "mass euthanasia" case, from Hurricane Katrina - which turned out to be made-up.

Or the "Trenchcoat Mafia" from Columbine - which turned out not to exist.

I am certain the media will come up with some other specious story to "explain" this event as well.  People like explanations - short, simple, and sweet.  We want to be able to pigeonhole these things and reassure ourselves that they are rare events and not likely to happen again.  And our European neighbors will shake their heads and say, "Thank God that sort of thing doesn't happen here!"

But it does of course. And if you want the simple, pat explanation why, well, schizophrenia is probably it.  But that is not a compelling news story, is it?

Schizophrenia sets in, in late adolescence and early adulthood. Most of these mass shooters are of that age. They go off the rails, get guns, and shoot people.  Not a very glamorous explanation, granted.  But it is the basic truth.

And what is disturbing about the explanation is that it does not pigeonhole these cases, but makes it painfully clear that they are quite common and almost to be expected, periodically, in our society, where mentally ill people are deinstitutionalized and sent off on their own with a bottle of pills and a promise to take them.  And of course, there are others who are never diagnosed, even though the warning signs were there all along.

People sigh and say "what can be done?" and others build memorials and talk about "forgiving the killer".  But maybe there is more we can do.  Maybe we can intervene earlier in these scenarios, long before they occur.  Because a pattern emerges in most of these cases - people losing jobs, flunking out of school, stalking co-workers, whatever. And this pattern is usually accompanied by sudden and large purchases of powerful firearms and ammunition.

It seems rather stupid to me to say, "We can't do anything about this" when we clearly could do something.

Friday, July 27, 2012

Is Four Years of Partying Worth $100,000?

Is this worth a hundred grand?  I don't think so.

In a recent report on Marketplace on public radio, they discuss how many colleges and universities are trying to attract students with nicer amenities.  Rock climbing walls, fancy swimming pools, and athletic centers that are more like upscale health clubs are cited as part of this trend.

Colleges and Universities are abandoning any pretense of education at this point - and just pandering to whatever students want (hint:  If you really want to bring up enrollment, a medical marijuana dispensary on campus is a sure winner).

Why are colleges and universities just blatantly pandering to students these days?  The simple answer is demographics.  As I noted in an earlier posting, the number of college-aged students out there is dwindling.  And schools have to compete to put butts in the seats.

The larger schools are attracting more students, as they can offer more "amenities" and 18-year-olds don't think in terms of what education is best for them, but what looks like a swell time.

The mythology exists that any college degree - even one in rock-climbing - will lead to a lucrative career.   And this exchange between the interviewer and one student is, frankly, scary:
"Then again, those fees aren’t exactly coming out of his pocket.
Gaied: I rely on loans. So why not, as far as I’m concerned?
Scott: How much are you borrowing to go to college, do you know?
Gaied: A lot. A lot. It’s like a life tax. You know, like, if you, if you want a job, and you want to, like, go about your life and your business, it’s just something you have to pay. Like a car payment."
A life tax - for four years of partying and rock climbing, you spend forty paying it off.  This makes no sense.  And a car payment?  Cars get paid off, in three or four years.

(Hint to grads:  Saying "you know, like," at a job interview is a sure-fire way to get spiked).

And I think employers are catching on to this as well, which is why the unemployment rate among recent college grads is so high.   People spend four years smoking pot and rock climbing and putting fart-mufflers on their cars behind the fraternity house, and well, no one wants to hire them.  They are not educated at all, but rather overgrown infants.

The marketplace is voting - and what it is saying is that worthless educations are worth less - or worth nothing at all, in terms of increased income or job prospects.

Statisticians like to tout that on average a college grad makes X% more in life than a non-college grad.  But there are two things wrong with that statistic, actually three.  First, it is a backwards-looking statistic.  You cannot figure out lifetime earnings until people die.  So by necessity, this statistic deals with outcomes of your parents' generation, not yours.

Second is the fact that averages are deceiving.  Yes, a Doctor or a Lawyer or an Engineer may make more money than the guy who mows your lawn - a lot more.  But the guy mowing your lawn may have a degree in Philosophy.   Averages are deceiving, as for every person making ten times more than average, there may be others making average - or less.  And worthless degrees  - degrees that sentence you to a life of low-wage service jobs - are not enhancing your income, no matter what statisticians say.

(Actually, if you think about it, these college statistics are meaningless.  A person who graduates from college isn't likely to make less than a non-college grad.   At worst, he will make the same.   So you average in him with all the doctors, lawyers, and professionals to make boatloads more, and you come up with this specious statistic.   If you factor in the cost of college into the equation, many on the lower end are coming out behind non-college grads.   Not everyone who goes to college will make more money than those who do not).

The third thing of course, is that you are not a statistic and your personal choices, actions, inaction, motivation, and plain luck have more influence on your life than statistics.

Colleges and Universities are chasing smaller and smaller Freshman classes - and yet at the same time need larger classes to put warm butts in the seats to pay their ever-increasing costs.  So they have to offer free ponies to the kids to get them to come to their University.  If they can make college seem like fun and not too much hard work, they can attract more students.

But beware.  The multi-million dollar athletic center with the rock wall and whirlpool baths is a trap, just as the fancy new dorms, student center, and other trinkets they throw at you are all traps.  They have little or nothing to do with a real education - and employers know this.

When I was studying Engineering, we had a gym - a dusty old weight room with some half-broken exercise machines, and an old tile pool that had seen better days.  I don't recall spending time in much.  And in Law School, I don't recall going to the "student athletic center" more than once or twice.

Why?  Engineering was hard. So was the law.  I had to spend all my free time studying to get good grades.

But doing the hard thing pays off in the long run, whether it is studying hard, working hard, or saving hard.  Difficult pays, easy costs.

What comes easy is often the worst thing for us.  And a school that sells a climbing wall as an attraction to students, is, well, selling easy.

Herding Cattle

Marketers herd people like cattle.  And people are malleable enough to move with the herd.

I was talking to a neighbor the other day.  We were in his yard while the cable guy was there, installing a new cable to his house.  Why?  Well Viacom and Dish Network got into one of these periodic hissy-fits that "content providers" and "service providers" get into, and of course, the issue was money, money, money.

Viacom wanted more money, and Dish Network didn't want to pay more.  So Viacom pulled the plug and insinuated that Dish customers would never, ever, ever get their fix of programs that you can easily download on the Internet if you have half a brain.
Move 'em out, head 'em up,
Head 'em up, move 'em on.
Move 'em out, head 'em up:
It is like shooting fish in a barrel.  So my neighbor panics and decides to switch carriers, and while on the phone, the operator (Sanjay in Bangalor, known to you as "Mike") sells him a "bundle" of Internet, telephone, and Cable-TV with "Great Savings!" and a monthly bill of well over $150, once the six-month discount expires.
Cut 'em out, ride 'em in,
Ride 'em in, cut 'em out,
Cut 'em out, ride 'em in:
Hah! Hah!
"I'm saving a lot of money!" he crows, forgetting for the moment that the reason he has Dish network was another "bundle" he was sold a few years ago.

We were then talking about the cost of owning a home, as he is thinking of refinancing his house.  At age 75, he has a mortgage, and with only a few years left on the loan, is refinancing the balance to "get a little more cash every month".   Age 75, and still living the cash-flow lifestyleSad.

Sad, because I own my home, free and clear at age 52.  And I realize how lucky I am.  We are talking related home expenses, and he tells me his utility bills are nearly double that of mine - but he keeps his thermostat set very low in the summer and high in the winter.  I pay about $200 a month, he's paying nearly $400.  Ouch.

And insurance?  about 50% more than I am.  That pesky mortgage prevents him from going to a high deductible or changing coverage.  "Besides," he says, "I get a great discount on my car insurance by bundling it with my homeowners plan!"

Ah, the "bundling" trap, yet again.   I was about to tell him I pay $15 a month to insure my car through GEICO, but I think better of it.  Best not to piss him off.  You can lead a horse to water, but you can't lead cattle anywhere except to the slaughterhouse.

I walk away dazed.  Here is a fellow who is going to refinance his house, add $3000 (at least) to the balance, in terms of closing costs and fees, extend the period of payment another decade, while at the same time, is paying too much for insurance and telecommunications services - not to mention electricity.

I didn't even ask him about his cell phone bill.  I didn't have the heart.

So, like most Americans, rather than take on his spending habits as being the source of difficulty, he takes on more debt to pay for it.  The debt will likely outlive him.

And this is the norm for most Americans - they are herded like cattle.  Viacom and Dish network have a little pissing match, so in response to Viacom's baiting, people switch services.  No one bothers to think that maybe watching television for 4.6 hours a day is a waste of money - and your life.

And rather than cut expenses in life, people would rather borrow more, save less, and sacrifice their future for the now.   People think in terms of monthly cash-flow and not in terms of overall net worth over time.

It made me sad, as he and his wife are nice people - smart people - and certainly deserve more in life than a mountain of debt and cable bills.

But then again, this is the way our society is structured - in fact, you might argue that at his age, he might as well just squander it all, as if he has any money leftover, the nursing home will get it, as he would not qualify for medicaid if he has any money.  So when you are over age 70, our society - and government - says "spend it all".

I am just not sure I would spend it on cable Tee-Vee, myself.  I hope my "golden years" are not spent in front of the boob tube.

The problem with Brick and Mortar

Brick and Mortar Stores suffer from two incurable problems - lack of inventory and lack of real bargains.

A lot of people who like to say "dagnabbit!" all the time, and decry each postal increase, like to whine about the demise of the brick-and-mortar store.  They claim it is the demise of small-town America and the small businessman.   They claim you can't get "good old fashioned service" online.  However, as Craigslist Personal Ads have proven, you can get bent-over online as well as you can in-person.

What is wrong with Brick and Mortar?  Everything.

Consider the cell phone store.  It is the worst place to go to get a cell phone.  Have you ever been in one?  They are a nightmare.  You will not buy a cell phone there, you will get sold one.  As I noted in my cell phone batteries posting, many cell phone stores will tell you, with a straight face, that batteries for your phone are "no longer available" - which is true, if the entire world comprised the confines of their store.  But the reality is, you can get a battery for your cell phone for about $4 on Amazon.

And like any other store, what they will sell you is what they have in stock.  You want a new smart phone?  Funny thing, but, they have one!  Maybe not the model you wanted, but something "just as good!"  You are better off getting your cell phone online - direct from the provider - than to go to a physical "store".  They can mail one to you in a matter of days.

Tire stores are the same way.  You go in, and they sell you what they have that "fits" that is in the back room.  Never mind whether it is a good tire for your car, or has a good wear rating.  They want to move inventory, so they sell you what they have.  When the only tool you have is a hammer, every problem looks like a nail.

And if a "Brick and Mortar" store doesn't have it in stock?  They can order it for you - by going online, and having it shipped to the store (as in the past) where you have to come back later to pick it up.   They thought that "shipping directly to your home!" was a big improvement, but of course, that just drove home the fact that you were ordering online.  Why not just cut out the middleman?

Some folks argue that a "brick and mortar" store allows you to "feel the goods" and see if they are of high quality.  I am not sure this is true, other than for maybe fabrics.   For most people, determining the quality of a pair of shoes or a set of tires, a car, a cell phone, or just about any product today, is a pretty futile task.   We base our perceptions on brand names and reviews - often online ones.  "Kicking the tires" is not really a worthwhile way of evaluating any product.

What "Brick and Mortar" stores do best is play to your need for instant gratification and your desire to impulse-buy (so-called "shopping").  When you go to a physical "store" you end up buying things you did not intend to buy in the first place.

The problems faced by the traditional "Brick and Mortar" store are many.  But their solution was worse.  Rather than try to be more competitive and offer better service than online retailers, the Brick and Mortar crowd decided that screwing their customers was the best approach.  "Selling" customers on products, marking up prices dramatically, and of course, selling extended warranties, became the name of the game.   They made their stores and the buying experience so unattractive that people stopped going.

The last time I went to a Circuit City, to buy a hard drive or something, the place was as dark and noisy as a disco.   The product layout and information (and pricing) was confusing, and the salespeople who hovered over you like a hawk, were less than helpful, wanting only to "make a sale" and get a commission, as opposed to truly helping or understanding the products.   It was no surprise to me when they went out of business.  Going there made a trip to the DMV seemed appealing (at least the DMV is well-lit and everything is explained in signs and brochures).

Retail, of course, is not dead - entirely.  But increasingly, it is becoming more of an impulse-buying experience.  After three years of vacancy, the Circuit City in our town is now a "JoAnne Fabrics and Crafts" store - mimicking the success of Michaels.  It caters to hobbyists and impulse buyers with aisles and aisles of crafting, scrapbooking, and other hobby ideas - ideas that you didn't realize you had until you visited the place.

I don't mourn the loss of "Brick and Mortar".  The good old days were anything but good.   For me to find the various things I need in life would often mean chasing all over town looking for them, and often settling for second-best.   Telephoning was time-wasting and time-consuming.

Today, I can go online and find something I need (like a part for my camper) and find the correct part at a competitive price and have it in a matter of 2-3 days - all without leaving my home.

Maybe you want to go back to the "Good Old Days" - I certainly don't!

Facebook Founder Calls It Quits

 Facebook founder Mark Zuckerberg says he can't live a lie anymore.

Menlo Park California, July 27, 2012 -  In a surprise move today, Facebook founder Mark Zuckerberg broke down during a press conference and admitted he was a complete and utter fraud.

The press conference had started out well, with various officers of the company making optimistic projections for the future, in spite of the staggering loss last quarter, mostly due to the founders' selling off massive amounts of of insider stock during the ill-fated IPO.   While the insiders of the company cashed out, it was at the expense of the remaining shareholders and company profits.

Facebook had reported a $157 Million loss on payments to shareholders, including chief executive Mark Zuckerberg, in its first results since its eagerly-anticipated stock market listing in May.

The loss was mainly due to one-off expenses associated with its flotation.  Excluding staff share schemes, Facebook would have made a profit of $295 Million.  However, news about slowing growth also caused the share price to tumble.

Officers of the company were upbeat, however, pointing to new trends in advertising revenue and in the expanding market for mobile devices.

Zuckerberg then took the stage to address the audience about this new growth market.

"Our goal is to help every person stay connected and every product they use be a great social experience," Zuckerberg said, "That's why we're so focused on investing in our priorities of mobile, platform and social ads to help people have these experiences with their friends."

He then sighed heavily and then said:

"Oh, fuck it. I can't keep saying this shit with a straight face. I have no clue why people find Farmville endlessly fascinating or why they feel the need to obsess about people they met in high school. At this point, I just do what my wife tells me to do, and that is to cash out as much as possible before it all goes horribly wrong!"

The press conference then took a bizarre turn, as he put his head in his hands and started weeping profusely.  "I'm such a fucking fraud!" he whimpered, "I mean, its not like I invented social networking or anything!  I just really got really fucking lucky!  And now everyone thinks I am a boy-genius with some sort of 'insight' into the Internet!"

Company officers tried to lead Zuckerberg off stage, but he brushed them away.  Wiping tears from his eyes, he offered a heartfelt apology to shareholders and users of what he called, "the biggest time-waster of the Internet".    "Hell," he continued, "I don't even use it anymore.  I'm on Twitter!"

When asked what his next plans were, Zuckerberg indicated that, since he was apparently blessed with massive amounts of dumb luck, he would use the remainder of his fortune to buy lottery tickets.  "Lots and lots of lottery tickets," he mused.

He suggested Facebook shareholders do likewise.  "Compared to our stock, lottery tickets are a sure thing!" he added.

Wednesday, July 25, 2012

Wither Apple?

Where is Apple going, in the long run?

Earnings reports for Apple are out today, and they are disappointing.  While interest in the iPad remains high, sales of iPhone are down.   Analysts who are bullish on Apple say this is because a "new" iPhone is due out soon, and the Apple faithful are waiting for the new phone to come out, before buying.

This might be true.  Or something else might be at work.

(Note that even these "disappointing" earnings still show stellar profits and profit margins for Apple, as well as sales increases from over a year ago.   But what is troubling to some analyst, I suspect is that profit margins are leveling off and sales rates are declining.   This is to be expected, I think, as the market for the iPhone and iPad products matures and saturation occurs.  To expect unlimited increased growth, on the other hand, would be idiotic).

As I noted in some previous posts about Apple and Why I am Bearish on Apple,  the company has a long history of coming up with trendy products which are wildly popular with a niche of users, and then just as quickly fade away - or fail to gain a mainstream following.  Third-party products, often at half the cost, end up taking most of the market share.   It may be trendy to show off your MacBook, but a basic Toshiba laptop can cost 1/5th to 1/10th as much.  That's a helluva price delta.

Again, the "closed box" model of Apple, where the device is literally sealed at the factory, prevents it from being modified by third parties or many accessories or add-ons offered for it.  It limits your service options, as well as repair options to authorized Apple dealers or factory service, and insures that there is one source only for parts and software.

As a result, Apple can command premium prices for its devices - which often are made very inexpensively in China.   A simple iPhone or iPad can cost hundreds and hundreds of dollars - but cost less than a hundred dollars to make.   When you are introducing a new product, without competition, you can get away with this - for a while.  But eventually, competitors smell blood in the water and start to offer products that are priced a lot less - and often these products end up taking over the market.

The iPhone is a case in point.  While it seems that "everyone" has an iPhone, the reality is, as I have noted before, that Apple has about half the market share of the smart phone market than Android does.  The Droid phones are open source - you can buy the phone from any number of companies, but the O/S is from Google. 

This is sort of a parallel to the model used by Microsoft, where they concentrated on maintaining a monopoly on the O/S while letting others kill each other trying to make the hardware for less.  And it is a model that worked - for Microsoft - and is working for Google.  Not only do Droid phones have twice the market share of iPhones, they are growing at twice the rate.

So to me, the analysts' argument that "people are waiting for the next model to come out" may be specious.  Growth in the smart phone market eventually will reach saturation levels, as everyone who wants one, gets one.  And getting a "new" phone every year or so, just because it has a few more features or a differently sized docking plug really doesn't make economic sense.

Yes, there are a few shallow people out there who think having the "latest and greatest" piece of electronic jewelry is worth spending a lot of money on.  But they want this to show off, not necessarily to actually do anything constructive with it.  And wandering around in a daze, staring at your iPhone all day long (which seems to be what people do with them) eventually will wear off.   Hula-Hoops, Tail Fins, Disco - all fads have a peak and then a valley.

It was only a few years ago that "everyone" was yakking on the cell phone - usually about nothing.   Then, they were all texting.  That fad seems to be peaking.  Today, everyone is running "apps" and surfing the web on a smart phone.   Do you think this is sustainable as well?

This is not to say that these activities are entirely pointless - only that their fad-like natures will attenuate over time.  Yes, talking on a cell phone can be useful.  But compulsively yakking on it, is not.  Similarly, you can communicate with a text message - but spending your whole day doing it is pointless.  And I think a similar thing will happen to the smart phone.  The novelty wears off, on anything, over time.

And once everyone has a smart phone, will they really "trade up" every three years like the automakers wanted you to do with cars?   Maybe.  Maybe not.  I think the latter - given the costs involved.

The iPad is doing well, and again, this is a product category that will be here for the long haul.  But, I don't see the $800 iPad as a long-term contender.    Other versions of these pad-devices will hit the market for far less than half that price, and many folks will latch onto those, simply because of the cost differential.   Like the iPhone before it, it will show a huge market gain, followed by competitors taking over the space.

There really is no reason an iPad should cost that much money, when a full-blown computer, or even a laptop, can cost as little as $400 - or less.

In a way, it is like the Segway Scooter.  A cool invention, yes.  Neat technical features?  You bet!  Worth spending more than the cost of a new car?  Not really.  Not if you have any common sense, that is.

And like with the iPad, what really killed off the Segway Scooter were cheaper three or four-wheeled generic scooters that people could buy for only a few hundred dollars.   They dominate the market, while Segway is limited to a narrow niche.

Again, Apple is not going bankrupt or anything.  I love it when people get extremist like that - Apple stock has to hit $1000 a share or go bankrupt - nothing in-between, now!   People are idiots.

No, Apple will make money - and is making money - but over time, its profit margins will be eroded by competition from cheaper pads and smart phones, which will cut into its market share significantly.  Apple will have to lower prices to compete - as it already did with it's iPhones (remember THAT?).   The growth in the pad market is not in the "bleeding edge" early adopters who don't mind tossing away hundreds of dollars for the latest-and-greatest, but in the secondary market - people like you and me who might bite on something at the magical price of $99 or $199, but not $799.

Which means the share price will slowly deflate over time, to keep in line with its earnings.

The idea that Apple can keep "coming up with new must-have products" again and again seems to me to be an unworkable marketing model.   After the iPad, what's next?

The vaunted Apple TV has been bandied about for years, but has yet to hit the stores.  And I suspect a lot of people will balk at paying a premium for a proprietary television that is locked into one service provider.   The trailer-park set loves their jumbo flat-screen televisions, but they buy then in bulk, at the local discount store.    Televisions are an established market with an established pricing structure.  You can buy a 42" flat panel television for about $500 to $700 on a good day.   Is someone going to pay $1500 for an Apple version?  I am not so sure.

Again, if we had a time machine we could have gone back in time about ten years ago and bought Apple at $100 a share and quintupled our money since then.  But back then, Apple's P/E ratio was in the tank, and anyone looking at that stock would not have said, "Gee, I think I'll buy this because the stock will shoot up in ten years when they invent something called an iPhone and an iPad".

It is hard to predict the future.   And in that regard,  I could be all wrong about Apple stock.  But I doubt it.  When you come out with a startling new product, it is easy to garner market share (of course, the product is not necessarily all that startling, given the number of prior Smart phones and PDAs over the years, including Apple's own Newton).  Keeping such a market to yourself is damn near impossible - as is continually coming out with startling new "must have" products.

I think Apple will calm down in the coming months and even years, as the smart phone and pad markets mature over time.

UPDATE:  This article pretty much sums it up:

Mobile users upgrading to smartphones at record rates, and choosing Android

New numbers from ComScore show that users of feature phones are upgrading to smartphones at record rates, and are overwhelmingly choosing Android for their new platform.

In April, 2011, just over 60 percent of feature phone users chose to stay with a feature phone when they got a new one. In April of this year, that number is down to 50 percent; meanwhile, the proportion of users choosing to upgrade to smartphones has gone from 38% percent to 47.5 percent in the same period. It's the tipping point for smartphone adoption: it's very likely that within a few months, smartphone upgraders will outnumber feature phone keepers.

Android is the platform of choice for these new users, according to ComScore's numbers: 61.5 percent of new smartphone users in April chose Android, while a significant but still much smaller 25.2 percent picked up an iPhone. Meanwhile, 7.1 percent went with Microsoft and just 4.8 percent with BlackBerry.

What does this say about Apple's prospects for the long-term?  And by the way, this disparity between Android and iPhone is increasing.  The last time I reported on this, it was like 50/30, now it is 61/25.  Ouch!

Tuesday, July 24, 2012

If you aren't pissed off yet....

If something I've said hasn't pissed you off, I'm probably not doing my job.

One of the problems with the financial Gurus is that they start off with great revelations, and then water it down to the point where they are pissing in the soup.

Soozie Orman, for example, started out with common-sense advice, and people flocked to her.  And then she realized that what people wanted to hear was validation of their poor life choices.  So her advice morphed from spending less and saving more, to "You're Approved!" to buy more consumer crap.  And she has made millions by doing what P.T. Barnum always said to do - tell the suckers what they want to hear.

But what is the point of that?

What good does it do to tell you that your frequent flyer miles card is a swell deal, when more likely than not, it will land you in a world 'o woe before too long?

What is the point in validating your poor life choices if all they do is convince you that spending is right and saving is for chumps?

And what is the point in saying that it is OK to obsess about politics, even though it is ruining your life and driving your friends away?

A feel-good happy blog, where everyone validates each others' poor lifestyle choices is really not of much use.   And frankly, the Internet is chock full of such blogs, discussion groups, and websites - where everybody reinforces each others' poor normative cues.

Think about it.  If you go to a Camaro website, people are going to say what a great car a Camaro is, and no one is going to say, "Gee, isn't this really a poorly engineered 'me too' copy of the Mustang, based on the shitty Chevy II/Nova chassis?  I mean, a live axle and leaf springs, for chrissakes!  This is hardly even automotive engineering!"

No.  No one will say that on that site.   It will be all cheerleading and hoopla.   And nothing is immune.  I mentioned before that the BMW Z3 was brought into production right after the ill-fated 318ti went out of production.   That poorly made hatchback was made at their Spartanburg, SC facilities, using leftover bits from the E36 (3-series BMW) and the E30 (previous generation 3-series BMW).  The Z3 was built at Spartanburg from, well, guess what?  A parts bin collection of E36 and E30 parts.

Yes, even BMW cobbles together cars from parts in stock.  They all do.  They are just cars, not time machines.

But no one wants to hear that.  They want to hear that manufactured products are magical and cool, and not just some piece of crap that marketing took off the test stand and rushed into production - which 99% of the time is about accurate - regardless of whether it is a car, an air conditioner, or a smart phone or a new operating system from you-know-who.

Reality is what it is, and often it appears to be unpleasant, as it conflicts with our own preconceived notions of the universe.  We want to think we made smart choices in life, when in fact, our choices were directed by advertising and peer pressure - and often were not smart choices.

A lot of people bought Edsels - and Vegas, and Pintos and Pacers and Citations, and whatever piece of crap the automakers are foisting off on us these days.  A lot of people bought poorly-made mini-mansions with fancy "features" and financed it all with crappy loans and are now crying in their soup.

And a lot of folks invest way too much time in politics - thinking naively that one party can "solve all our problems" if only the tax cuts were allowed to expire/renew and if only Gay marriage could be outlawed/legalized.

The harsh reality is that much of what we all believe is a mountain of bullshit.  Our political opinions are crap - shaped more by what we read in the media than anything else.  And our purchase and investment decisions are similarly poorly made.

It is very hard to see through the fog produced by our society and the media.  And what reality is, is hard to fathom.  But the closer you can see to that reality, I think, the better off and more successful you will be.

The Mitt Romneys of the world didn't come to make $22 million a year by being naive and by following someone else's narrative.  They perceived opportunity where it existed, without letting emotional arguments or media bullshit get in the way.

And that, I think, is the key.


How do you spot a troll?  There are a number of tip-offs.

Trolling is a popular sport these days.  The name of the game is simple, say something outrageous or get some one riled up by BAITING them online, so you can make them look foolish.

In the early days of the Internet, Trolling was a sport, done for fun, just to see if you could get people worked up.

So, someone would go on a discussion group and post something noxious, just to see the reaction.  It is like a kid throwing a big rock into a pond, just to see the splash.

Today, Trolling has gone pro.  And Professional Trolls have one thing in mind - to discredit your arguments by discrediting you.  So they turn every discussion into a personal attack, and try to get you all riled up to make you look unhinged.

How do they do this?  After a while, it becomes easy to spot:

1.  Personal Attacks:  As a reader discovered after commenting on a ridiculous article (obviously a plant) that argued that buying a new car and financing it over time was a better deal that buying a used car and paying cash, personal attacks are the first line of offense for the Troll.

"Well, obviously you are just poor and have bad credit!  So you can't afford a shiny new Scion, like I have!"

It is taunting behavior, like in the schoolyard - bullying.   And the goal is to get you to say, "Well, no, I have tons of money, I can buy any car I want!"

To which they reply, "Well, I see you enjoy showing off how wealthy you are!  While others struggle in this country!  Some of us can't afford to pay cash for cars like you can!"

And so on.  You can't win these "debates" so don't bother trying.

But they are not hard to spot - they turn the argument from the facts of the case, into an argument about you and your credibility.

2.  Nit-Picking:  This is usually the second line of offense for the Troll, and may be used in conjunction with a personal attack.  It can be a main attack, or just added in as a flanking maneuver.

For example, the Troll, in making his vicious personal attack (while ignoring the substance of the arguments) will toss in, as an aside, something like, "And by the way, you misspelled the word 'interest' in your message.  If you were really so smart, you would have caught this!"

The idea, again, is to get you all riled up.   Most folks, see messages like this and say, "Well, you are missing the whole point!"

But, yes, that is the point - to miss the point.   They can't argue, successfully, against your well-reasoned numbers argument.  So they focus on the trivial - a misplaced decimal point or a typographical error, or whatever.

For example, one fellow, in a debate, chastised me for "lying" when I stated that median income in the US is about $50,000 a year.   "Median household income is $51,000 a year!  Maybe you should go to college!" he said.

Was that an argument, or just someone trying to get me all riled up?  And it worked, too, at least for a while, as I foolishly felt I had to "respond" to point out that what I said was the same thing.

Just walk away from those sorts of "arguments" as the minute you try to "correct the record" they have you - and they will nit-pick your correction.

3.  "There are a lot of generalizations here..."  This is a phrase I see a lot these days on online forums - several times in fact.  The idea is to offer a blanket condemnation of the argument as being not specific enough - but in terms themselves which are not specific (your irony meter should be pegged, as this point).

There are a lot of generalizations?  Really?  Could you be more specific?  Or do you prefer to "generalize" yourself?

It is a non-argument argument - something that sounds officious and wise, without really saying anything.   And you can't "win" an argument with someone who says things like this, so just move on.

Unless you are Encyclopedic, the "generalization" Troll will never be happy.  And of course, if you are Encyclopedic, the Troll will say, "Whew! There is a lot of stuff here!" which is another Troll tag line.

You just have to walk away from the Troll.

4. The Straw-Man Argument:  You see this all the time in leasing debates or new car buying discussions.   A person compares the obscene cost of buying a brand new car, financing it, insuring it, and taking that horrible first-ten-minutes depreciation with the cost of an old clunker than "needs thousands of dollars of work."

It is a straw-man argument, in that they set up a man-of-straw, and then show everyone how brave they are to knock him down.

So, for example, they say, "Well, you can spend $5000 putting a new engine in your car, so you might as well just buy a brand-new car, it costs only $500 a month!  It's a lot cheaper!"

Or another one I've seen lately is this:  "Well, used cars are more expensive these days, and the interest rates are higher on the loan!   So you are better off just buying a new car!"

Both arguments take absurdest positions to compare to the desired outcome.  In the first one, is the idea of a clapped-out car needing constant repair, as opposed to, say, a late-model used car that requires little more than oil changes.  In the second, a new car is compared to a used car sold at a car dealer at a highly marked-up price.  New car salesmen often use this tactic, comparing the sale price of a new car to the windshield sticker price on a similar used car on their own lot.   Of course, they might just put that car there for the very purpose of making the new car sale seem "reasonable".

Again, you can't win with Trolls.  They will make one absurdest comparison after another, and Greek Chorus of other Trolls will chime in.  Just walk away.

5. "You Clearly Hate..."   This argument is interesting in that once again they fail to address the basic argument, but at the same time, they make it out like you have an "axe to grind" against the company or service involved.   Again, the message is clear:  You are emotionally unhinged.  And if you respond to this sort of thing, you validate their argument.

For example, I posted about how QuiBids sucks, and I got several responses along the lines of "Well, you clearly hate QuiBids..." or something to the effect of, "Well, you just hate it because you lost and don't know how to properly bid!

Of course, neither are true.  I never have "bid" on Quibids (it is not bidding, anyway) and thus never lost.  And I don't "hate" them, I am just pointing out how it actually works and the fact that most people are going to lose money on this gambling-like venture.  It is no bargain is all I am saying, and no, no one is getting iPads for $10.95 or whatever.

Again, you can't "win" at this sort of argument, as any response at all, is just proof that you "Hate" leasing or new cars, or Quibids, or Mitt Romney, or whatever, and that makes you a "Hater" (whatever that is!) and thus to be ignored.

* * *

There are, of course, other classic Trolling behaviors, and they keep evolving all the time.  And some are rather complex.  The counter-Troll is one of them.  Using separate accounts and usernames, the Troll sets up a posting that makes a ridiculous or stupid argument, and then use a separate screen name and account (the counter-Troll) to easily pick it apart.  It is the straw-man argument taken to its logical conclusion - arguing with yourself.

Why do they do this?  Well, as I noted before, Trolling is going pro.  The Internet, once a small-time thing, is now the main way most people get their news, information, and entertainment.  And the Internet was a threat to many established businesses.  The truly free-flow of information, for example, on car pricing, is a threat to the car dealer.  If people can add up what it costs to own a car, they would be shocked.  As I noted in another posting, it can cost $8000 a year to own a $20,000 car - and most people fail to realize that.

So many corporate interests hire Trolls to patrol the Internet and "shout down" any ideas that might give the consumer a "heads up" on a bad deal.

And a lot of these are seen in car discussions - as happened to our reader.  You try to point out that a buying a crappy econobox when you are 23 and paying through the ass for insurance, makes no sense at all, and you will be shouted down by a legion of harpies.

And that is one reason I started this blog, as I got tired of being Trolled.  And that is why I delete Troll posts, whether they trying to argue that QuiBids is "a good deal" or that leasing a car "makes sense".

Bad deals never make sense, no matter how much they are Trolled.   And most folks desperately want to be told that bad deals are good deals - either to validate a bad decision they already made, or to justify them entering into a bad deal - to get some piece of bling or candy as a result.

It is a shame, but the Internet really isn't a good source for information -  anymore.