Wednesday, April 27, 2022

Mustang Mach E - The End of Tesla?

Ford has introduced a car that mimics the Tesla Model-X in many ways - except the Model-X's dismal quality.

First to market is last in the marketplace.  And this was driven home to me recently by an episode of Jay Leno's garage (the YouTube version, not the annoying Cable version with the goofy sound effects).  The Ford Mustang Mach-E is a technological tour-de-force that out-Tesla's Tesla in every respect.

Tesla has has a checkered history in terms of automotive quality.  Consumer Reports famously called the Model-S the "best car they ever tested!" but a year later, rated it "unacceptable" as continuous electrical problems made the car very unreliable - spending more time in the shop than on the road.

The Model-S and Model-3 have been fairly popular despite Consumer Reports' experience.  But the Model-X, Tesla's attempt at an SUV, has met with unanimous condemnation as being half-baked.  A big part of the problem is the ill-fated decision to make the rear doors as gull-wing doors.  They have lots of fit and finish problems, leakage problems, and despite the numerous sensors designed to protect the doors (and adjacent cars, lamp posts, etc.) they tend to open up in places they shouldn't - such as garages, where the doors slam into the ceiling with predictable results.   Even when they work properly, the gull-wing doors end up being impractical, as you can't exit the back seat if you are in a garage or other obstructions block the doors.

Ford avoided that problem by using conventional doors, and as they have more than a century of experience building cars, their interiors look more finished and the fit-and-finish are superior to the Tesla Model X.   Of course, the Mustang Mach-E has all the usual electric car features - 0-60 in 3 seconds or so, and a range of about 300 miles.

The problem for Tesla is that their monopoly in the marketplace is evaporating faster than spilled super-unleaded. When Tesla was the only game in town, they could sell their carbon credits to other carmakers.  Once those carmakers start selling their own electric cars, the market for those carbon credits might dry up.  And once other carmakers offer better quality cars at better prices - with more established networks of service centers and dealers, well, Tesla might find itself in a bit of a pickle.

Then there is Musk.  A lot of people who are what we used to call "limousine liberals" embraced Tesla as they thought Musk was  progressive and that driving a Tesla, like driving a Prius, was a method of virtue-signalling.   But it is, in a way, akin to how Hippies in the 1960's drove VW Beetles, which were poorly made Nazi deathtraps.  They thought driving a "bug" was a means of signalling their anti-establishment credentials - by sticking it to GM and the "Big Three."

Years later we realized (although many at the time realized it) that the VW Beetle was designed by a darling of the Third Reich and approved by Hitler himself.   It was a fascist car, to say the least.  And safety?  The reason Ralph Nader condemned the Corvair was because it copied all the bad features of the Beetle, particularly the swing-axle suspension.  Before he wrote Unsafe At Any Speed about the Corvair, he wrote Small on Safety about the VW.  No one read the latter book.  We endowed VW with an aura of hipness that was undeserved.

All that was swept under the rug as VW kept the Nazi-connection fairly quiet.  But Musk, on the other hand, seems to make a nuisance of himself, shooting his mouth off all the time.  I noted before that the Internet sort of has turned on him.  Sure, there are still legions of fanboys, but most of those are like Johnny-bots - fake, fake, fake.  Rich people hire companies to manage their image and manage damage control.  So it is not hard to conceive that Musk does likewise.

Problem is, despite the Musk-bots and fanboys, it is becoming readily apparent that Musk was no great inventor with a grand vision of the future, but an opportunist investor who is more interested in leveraging his wealth through strategic acquisitions than in any grand vision of colonies on Mars or solar-powered home power modules charging electric cars.  To him, it is all about money, period, and if that means posing as a Leftist, he will do so.

But is increasingly apparent he is far from a card-carrying commie.  He has been seen with the mavens of far-right thinking, including he odious Joe Rogain and "Professor Doctor" Jordan Peterson (just back from Russia with his new brain implant!).  Now, granted, you can understand why a Billionaire would want lower taxes, but why promote someone who wants us to go coal-powered cars, when you are selling electric ones?

The three stooges in front of the Tesla pickup truck.  Whatever happened to the Tesla pickup truck?  Meanwhile, Ford and Chevy have already introduced theirs.....

Yes, that.  You see, while I still think the Twitter takeover is a shell game (and others recently are thinking the same thing) he has no intention of consummating, Musk has hinted greatly that the first thing he will do once he "owns" or controls Twitter is to unblock the account of the most notorious and odious tweeter in the history of Social Networking:  Donald Trump.

God Help us.

Of course, whether people will fall for the Russian bots and other nonsense that happened last time around remains to be seen.  Will the media breathlessly report every tweet Trump makes?   Twitter doesn't really have a lot of subscribers, but the media all subscribes to Twitter and as a result, will make a news "article" about a "controversial tweet."

To paraphrase a famous comedian, everything I have heard on twitter was against my will.  I am not on Twitter, I am not a subscriber, I have never posted a tweet.  But since the news media thinks tweets are newsworthy events (when they are not even events!) they re-post tweets in nearly every news article.  Like it or not, tweets are flung in our face.

Two things could happen here.  Many are thinking that the secretive "family" financing Musk is using will require that he sell a big chunk of Tesla shares - which drove the price of Tesla down quite a bit.  Musk has margin loans on about half his shares (!!) meaning if the price drops too far, there will be "margin calls" to sell those shares to pay back the loans.  This in turn sends the price lower, and a death-spiral results.  We saw this in 2008-2009.

Meanwhile, nervousness about the whole Twitter deal has sent Twitter shares falling below the $54.20 bid (get it? 420! As in marijuana! Tee-hee! This is how big takeovers are done, with numerical puns!) which some observers claim means the market is saying there is only a 62% chance the whole deal will go through.  If there was a $54.20 firm offer on the table, the share price today would be damn close to $54.20

You can see how the whole house of car[d]s can fall apart rather quickly.  Or maybe that is the plan.  Sell out of Tesla and buy into Twitter - get out of an industry that is about to become very, very competitive (and one of thin margins) and into one with potential growth.  Or so he thinks.  One thing we are seeing today is that the "FAANG" companies are not invulnerable and let's face it, they haven't been around that long.  Sure, Bezos is building is "Big Screw" in Arlington, but the business of selling crap online and delivering it is proving to be one of narrow margins, particularly when your warehouse workers and delivery drivers start to unionize.  Netflix?  Well, we know how that is working out.  Facebook?  Profits are up, subscribers down.  Tech is a tough place to make money - consistently - particularly when your "tech" is not really tech.

And social media?  The problem with social media is there is always a new form of it coming down the pike.  Tick-Tock, which is utterly idiotic, has grown by leaps and bounds, even though the app allows the Communist Party of China to track your every move and thought (there is an X-rated version of Tick-Tock, I recently was informed - prime for Chinese blackmail!).  Meanwhile, people are tiring of Twitter and particularly Facebook, the latter of which is seen as a platform for Boomer Karens to complain about everything and spread rumors and falsehoods.  Facebook is unhip, and unhip is a death sentence on the Internet.  Thus, despite mounting losses, Zuckerberg is smart to try to latch on to the "next big thing" in social networking.  He only has to hope that his next big thing is the right one, out of the thousands of possibilities.  He may find that the Metaverse is less popular than some app written by an 8th grader in Iowa that does nothing but allow people to exchange 10-character messages that are nothing but emoticons.  Say, I should Patent that!

All I can say is bring popcorn.  The next few years are going to be interesting - if they are not in fact frightening or deadly.  What seems to be unstoppable forces today can quickly become eunuchs tomorrow.

Remember back in the 1980's when everyone thought "Japan is taking over America!"?  And yet today, Toshiba is bankrupt and Japanese young men are refusing to leave their bedrooms for years on end.

Things change.  Dramatically.  Faster than we expect.  The rise of Tesla is proof of this.  The fall could be as quick.

Monday, April 25, 2022

Fitbit Fixes Itself -Too Late!



Fitbit has finally improved its coding and its app, but it may be too late.

I wrote about Fitbit before, in fact several times.  Some of our friends had Fitbits and they said it helped them keep track of exercise and lose weight. So, Mark wanted to get them, too. I caved in as they were less than $100 apiece as I recall.

Well, fast forward about 18 months and one of the fitbits is broken and the other one is not taking a charge. The Aria 2 scale turned out to be a nightmare of incompatible software and a poorly-written app. It never could keep track of who's weight was who's and almost every weighing was listed as "GUEST".  When I tried to assign the GUEST entries to individuals, it kept switching them back to GUEST.

My friends who all had Fitbits now have Apple watches as they are in the Apple ecosystem.  I managed to cobble together a working Fitbit from my broken unit and Mark's bezel and wristband. That lasted about another six months and then stopped taking a charge. They're no longer in a drawer somewhere, they're in the trash.

Mark was undeterred and wanted to get another Fitness tracker. So we ended up buying a Huawei Fitness tracker online for cheap. I bought a Samsung "active" phone which also tracks Fitness and weight.

But recently, I was looking at the Aria scale which is still working, and decided to try programming it again, since we have a hotspot which is left on all the time. I logged on to my Fitbit account after doing a password reset was able to load the app on my phone. I tried the scale again and this time, instead of saying "GUEST" it actually logged my weight properly. The app seems to have improved and doesn't seem to have the bugs that it had before. And I'm pleased to report that since I've been using the scale again, I've lost 10 pounds so far. It's a start.

UPDATE: I believe the scale updated its firmware when I synced it with my Fitbit account. But I could be wrong about that. Whatever the reason, it finally seems to be working as intended and no more of these stupid GUEST readings, or at least a lot fewer of them.

I sent an invite to Mr. See, and I was able to log him onto the scale as well and easily convert his "GUEST" readings to his account. Finally, several years later, the Aria 2 scale is working as it was supposed to originally.

But it may be too late for Fitbit. Since they came out with their product, a number of "me-too" products have come out, including the Apple watch and various knockoff Fitbits, such as the Huawei model that we bought for cheap. 

The reason we bought the Huawei model is that the original Fitbits and Aria 2 scale were so disappointing.  There was no compelling reason to stay in the Fitbit universe. Between the the poor performance of the products and the number of "me-too" fitness trackers entering the market, Fitbit was doomed. People who paid $50 a share at the IPO were disappointed when Google bought the company for about seven bucks a share back in 2021. At least Google has the IT people to fix the app and the website, though.

Fitbit is a prime example of two characteristics of technology stocks. First, an idea whose time has come is not necessarily a profitable idea. Second, if you're first to Market you're often last in the marketplace. Fitbit blazed the trail for others to follow - others who learned from Fitbit's mistakes. Moreover, competitors were able to incorporate Fitbit characteristics into their existing ecosystems. Apple was particularly good at this, as Apple users like to stay within the Apple environment. Why bother having a Fitbit, when an Apple Watch has far more features?

Sadly, the financial media, particularly the shouting guy, exhorted us to buy these IPO stocks, claiming that they're going to go through the roof. But this isn't always a guaranteed thing. In fact tech stocks tend to be very risky investments as the few that succeed, succeed spectacularly, but the majority end up in the trash heap.

What Google plans to do with Fitbit is anyone's guess. I guess they want to do a "me-too" of the Apple watch for the Android ecosystem. At least Google has the resources for proper coding and app development. And maybe newer Fitbit products will be an improvement in quality and durability as well.

Of course, the damage is already done. Fitbit has acquired a reputation of having unreliable hardware and sketchy software. That alone was the reason we switched to the Huawei fitness tracker and didn't bother looking at the Fitbit products, which were also more expensive.  I guess they figured they could command Apple prices.

Then again, in the Google universe or I guess "Alphabet" as we're supposed to call it now (not me!) the cost of operating the Fitbit division probably amounts to a rounding error. The people doing coding and app development for Fitbit were probably sent there in exile from the main part of Alphabet as punishment for some misdeed.

Anyway, I'm thankful they finally fixed the software so that I can finally use the scale, over four years after I purchased it.  Whether or not Google will pull the plug on Fitbit in the next four years, remains to be seen. Unfortunately, that's the problem with tying pieces of hardware to specific websites or apps. Once the manufacturer withdraws support for the software, you basically own a brick.


Sunday, April 24, 2022

Jesus Going Viral

Is the social media our new religion?

I saw the above cartoon and broke out laughing.  But the more I thought about it, the more disturbed I got.  The author has hit on something - the language of social media is the language of religion.

I noted before that one of the interesting things my brother did on his way to his PhD in puppetry, was to do a thesis for his masters in theater history on how the language of professional wrestling is that of theater - and not sport.  In sports, we have practice, we have the ring or the gridiron or the playing field.  In sports we have uniforms and locker rooms.

In professional wrestling - as in theater, we have rehearsals, we have the stage, we have costumes, and we have dressing rooms.  It is interesting how language can subtly define things.  And as part of his research, he went to a professional wrestling event and they took him backstage beforehand and showed him all the tricks of the trade, and admitted - as all professional wrestling people do - that it was all clever fakery.  This is not to say people don't get hurt - they do, when something goes wrong.  The wrestling people don't advertise that it is fake, but will admit to it, for legal reasons (for example, if people are dumb enough to gamble on the outcomes, which are pre-determined).

But it is the language angle that fascinated me.  And in social media, it is interesting how we are exhorted to "follow" people on Facebook, and "like and subscribe" on Youtube.  People follow celebrities as well as social media celebrities just as they follow religions.  And perhaps religions gave us the first celebrities.

I noted before that it seems to be a human need for people to elevate one of us above them.  Dictators, celebrities, superstars, political leaders and whatnot do not achieve power by forcing it upon us, but by us elevating them.  Even Hitler had legions of followers - which is how he achieved power in the first place.  Even after he reduced Germany (and most of Europe) into a smoking ruin, there were still people who "believed" in him, and indeed, there are still some today, oddly enough, in the United States.  There are still people in Russia today, who worship Stalin.

Almost every religion - perhaps all of them - has some celebrity figure that people follow.  Christians have their Jesus, Muslims have their Mohammed, Jews have, well a plethora of old-testament figures (collect them all!) particularly Moses.  And if you challenge the authenticity of any of these figures or mock them, you will generate a world of hate. For some people, celebrities are the ultimate "don't go there" and religious celebrities particularly so.

So what's the point?  Well, for starters, I think we are creating a religion out of celebrity - and celebrities out of religion.  People literally worship their favorite movie or rock stars - an ersatz religion of sorts.  In an era where fewer and fewer people are regular churchgoers, perhaps celebrities are our new Gods - a polytheism for the new era.  Just as the Romans - and the Greeks before them - had multiple Gods to pray to for various forms of relief, today we have various celebrities to satisfy the need for worship in different parts of our lives, or for different people of different bents.

And as for religion, we have created celebrities out of religious figures - Jesus Christ, Superstar.  I guess I never understood the title of that Broadway show (and later, movie) but he was really the first superstar.  Abandon your plethora of pagan Gods - and worship one Superstar!

But in recent years, poor old Jesus has been hijacked as a celebrity endorser of political figures and even products.  People posit that Jesus endorses Trump, for example, and they are deadly serious about this.  Jesus has been morphed and molded to fit the views of people who would never embrace his real message of peace and suffering on behalf of mankind.  In their minds, Jesus is a professional wrestler who is coming back with a vengeance - taking names and kicking ass, preferably with his holy AR-15.

That doesn't sound like Jesus, but that is what they have made of him.

I guess the scary thing about all forms of celebrity worship is that it is a way of putting your brain in neutral and letting someone else drive.  A celebrity is accused of doing something horrible, and people will still "believe" and "follow" that celebrity, right to hell.  Caitlin Jenner slammed her Escalade into a row of cars and killed one poor lady, but her followers will claim to their dying breath it was an "accident."  Myself, having seen the video, wonders why someone towing a trailer would be tailgating - but that's just me.

Similarly, there are Michael Jackson fans who, to this day, defend him to the death.  I mean, even if you can assume all the legal cases against him are unfounded, the shear weirdness should be a wake-up call to mindless followers.  Ditto for "Prince" who some claim is the greatest guitarist ever - notwithstanding Jimmy Hendrix - but I cannot for the life of me recall a single guitar riff in "Raspberry Buffet" or whatever other songs he did, that was of note.

Again, a good publicist can make you forget all those messy details.

I am not sure what the point of all this is, other than if you are a rabid "fan" of a celebrity, you are a very, very sad person, because you are trading in a life of your own to merely live in the shadow of someone else - who is manipulating you to their own end, to your detriment.

Fuck celebrity.


Saturday, April 23, 2022

Johnny-Bots

What is up with all the brigading for a second-rate actor?

Johnny Depp is on trial - at least a civil trial - over whether he is a wife-beater or his wife is a husband-beater.

Yawn!  Who the fuck cares?

Well, if you read social media, you'd think a legion of people think this is an outrage, that Johnny Depp is innocent and a great guy and his career was "ruined" because of his wife's accusations.  Oh, and the things they say about his wife would make a sailor blush.

Here's the deal:  Johnny Depp was a teen hearthrob in Edward Scissorhands and did a decent job acting in a number of movies.  But let's face it, the "Pirates of the Caribbean" franchise was just a tent-pole summer blockbuster series with no discernible plot or real acting.  It was all CGI and explosions - an explosion movie - the junk food of Hollywood.  Sells well to the teens and the overseas market.

But Depp has aged and apparently spent a lot of time at the buffet.  Acting, like music, is a young man's game.  If you think about all the great crooners of the 40's and the rock stars of the 50's and beyond, many became famous in their teens and saw their careers end in their 20's and 30's.  The same is true today with actors - people want to see young, attractive people on-screen.  If you are young and good-looking, well, it doesn't matter if you can't really act.

If you can act, well, your career can go on forever.  Actors like Helen Mirren and Meryl Streep, for example, keep getting roles because they are great actors.   But even then, they are not being tapped for next summer's "tent pole" action explosion movie based on a comic book - unless they want to play the evil villain (who are always old).

Depp is no Meryl Streep.

Depp has simply aged-out of the genre and he doesn't have the acting chops to do serious films.  He claims he would turn down $300 Million from Disney if they offered him to do a "Pirates 6" (Really? there were five of those turds?) but Disney has other things on its plate, and franchises don't go on forever.  What teens are going to see a geriatric puffy-faced ballooning Depp play young?  It just gets embarrassing.

So it comes as a surprise that people online are rallying behind him and dominating some social media sites such as Reddit, with supportive comments and about the worse things you can say about a person, about his wife.   The whole thing smells like gamer-gate.

I don't give a shit about Depp one way or the other - just pointing out that his career has ended due to organic reasons, not because his wife wrote an op-ed piece about him.  But what is interesting is that wave upon wave of people - mostly men - are brigading social media in an outpouring of support for Depp.

Or are they?  A flyer found on a windshield of a car at the courthouse (I saw this online briefly, but it was downvoted to oblivion - if you have a copy, please let me know) claims that people are "brigading" - posting numerous messages under fake names - to make it seem that Depp has deep support.  Indeed, countries (notably Russia), corporations, and celebrities do pay people - companies, actually - to groom their image on the Internet.  It isn't hard to create a tidal wave of "opinion" online by simply flooding every forum with postings and comments supporting a particular position, person, company, or country.  The implication in the flyer is that Depp has hired such a company to create an astro-turf movement and make himself look better.  This may win in the court of public opinion, but isn't likely to sway jurors, who by law, are not allowed to read online postings during the trial.

I noted before that libel suits are a dangerous weapon that often backfires.   Oscar Wilde tried to sue the Marquis of Queensbury for calling him a "Sodomite."  Not only did Wilde lose the case, he ended up being criminally prosecuted for sodomy and sentenced to hard labor.  Ahhh.. the British!  Their homophobic laws live on in every former colony of theirs - in Africa, Asia, and the Caribbean!  Thanks Brits!  Keep up the good work, civilizing the planet!  Maybe Brexit was a good idea - go home and stew in your own juices for a while - leave the rest of the world in peace.  I mean, the UK has done enough damage already.  Now it's our turn!

Depp tried to sue his ex-wife in British Courts and lost.  That's the problem with libel trials - they end up not working out the way you wanted to.  Not only did he fail to prove his case, the judge went out of his way to call Depp a wife-beater.  So you'd think he'd learn from that experience and move on.

Win or lose this trial, odds are he won't gain much from it.  Even if he won, I doubt a jury is going to agree he lost much money in the deal, as he testified he would turn down $300 Million from Disney just out of spite.  That's not damages - that's self-inflicted damage.   And given all the salacious details of his life being aired, I doubt many studios would sign him on to a movie, in addition to the puffy-faced, overweight old-man problem he has.  He just looks like shit.  From pretty-boy to My 600-pound life, in a matter of years.

So what's the point of suing?  What's the point of paying for Johnny-Bots to cruise the net and praise him?

Two theories:

1.  He has freaking lost his mind and all the stories about anger management problems, drug abuse, and narcissistic behavior are true.  He really believes - like Trump - that he is the greatest person in the world and a "victim" of grave injustices.  He also idiotically believes that a libel trial will solve all these problems after he already lost one trial in the UK - where libel actions are easier to bring and win.

2. This is all part of a plan to become a "celebrity" whose only claim to fame is being a celebrity.  Sort of like Brittany Spears or the Kardashians - their only claim to fame is their arrest records and the shitty things they do (on purpose) to get attention.  You can't be that type of celebrity without a lot of dirt in your past.  No one reads tabloid articles about Tom Hanks.

The second theory makes more sense.  His acting career is over, so he has to morph to "bad boy celebrity" mode, sort of like Charlie Sheen (Carlos Irwin Estévez), after he stopped looking cute.  And these libel trials are doing a great job of keeping his name in the paper and on everyone's lips - there is no such thing as bad publicity.  He is carefully molding his new image as a wounded victim of modern feminism, which will appeal to the young male demographic of gamers and incels.

He'll probably come out as a Republican, soon.

This trial (and accompanying online comments) are also an indictment of the "#metoo" movement - pushing back at the idea that someone's career should be over just because someone accuses them of something.  Oddly enough, the #metoo movement seems to claim more Democrats than Republicans, as Democrats usually resign in shame, while Republicans just embrace the big lie (or one of the many big lies) and move on.  Waddya gonna do about it?

I guess the point is, we are being manipulated - yet again. I could just feel it when I read some of these comments online - they were fake as fuck.  It was like during the Trump era, where you would see this wall of comments about how great Trump was, and you had to wonder who these people really were.  I can't put my finger on it, but it just felt fake.  And today, well, we know they were fake.  Some people still believe, though, and for true-believers, anything is true.

The comments are so bizarre and over the top that you almost have to laugh.  One fellow opines, "The vast majority of the world loves Johnny Depp!" when in fact, the vast majority of the world doesn't know who he is - or cares.  Bear in mind that there are billions of people in this world, and only about 330 million of them live in the United States.  There is another planet beyond our borders  - where more important things are going on other than celebrity hissy-fit trials.

But innocent civilians being gunned-down by Russians in Ukraine takes a back seat to a celeb-show-trial in this country, which is probably making Putin very happy.  In fact, it makes you wonder who is behind the Johnny-bots.  Not all Russian propaganda is along the lines of "Mother Russia is best at everything!"  In fact, very little of it is.

You see, this whole thing plays into the misogyny and anti-feminism and "incel" angles - creating this visceral hatred of one woman over events that we, as ordinary citizens, really know nothing about - or should really care about.  It works in so many ways - to divide Americans along political and gender lines, and to distract us from far more important things in the world.

And yet, here I am blathering on about it.  Touché Putin, well played!

Friday, April 22, 2022

Netflix - First to Market, Last in the Marketplace?

Netflix blazed the trail, and is now paying the price.

We subscribe to Netflix on and off.  We paid for a month back in December - or was that Disney+?  Anyway, we bit the bullet and paid $9.99 for another (non-consecutive) month's service in March and it is set to expire this week.

We've watched it about 2-3 times a week, at best.  We just don't watch as much television as we used to - the phone has taken up that blank spot in our lives.  But with Netflix the problem is compounded by lack of content.  Back in the day, they had Movies - troves of them, thanks to a lucrative contract they signed with STARZ - who didn't realize what streaming really meant.  Well, that contract expired and the major studios all started their own streaming services and Netflix was starved for content.

They had no choice but to create their own.

And some of it has been very good. 

But a lot of it has been forgettable.  There are a number of series which were not renewed for a second or third season.  House of Cards - the British version - was very good, but no longer available on Netflix.  The American knock-off was fine, for the first season or two.  Then the "scandal" involving Kevin Spacey and, well, maybe it was best that was the reason to cancel the series before it sucked really, really badly.

I just logged on this moment - the new series they are promoting is a series of live interviews with John Wayne Gacy.  Hard pass.  This is the best Netflix can do?  (Oh, and I just checked, those interviews are already on YouTube for free - not that you'd want to watch them).

That seems to be the depth of their programming - mostly women-oriented films, crime dramas, or "guy in jail is innocent" kinds of series.  I'm surprised they aren't trying to do one of those about Gacy.

Of course, like with YouTube, it seems the people running Netflix are bound and determined to destroy the interface. They keep upgrading it by deleting features such as the rating system they used to have. Their argument was that people were down voting some of the videos and as a result, people weren't watching them. In addition to that, they used to have descriptions of the shows so you could see what it is you were going to watch. Now the descriptions are so brief and it's such a small font it's impossible to figure out what it is you're watching. I clicked on one movie recently, and the only description was that it was "based on the book."

So it came as no surprise when Netflix reported they lost 200,000 subscribers last quarter.  Granted, they lost 700,000 subscribers in Russia alone, due to sanctions.  However, they had projected adding 2.5 Million subscribers, so this was quite a dive.  Subtracting the Russian loss, they fell short by 2 million subscribers from projections.  Wall Street punished them with a 20% share price drop.

Oddly enough, Netflix seems to be earning a profit, and thanks to the drop in share price, has a somewhat rational P/E ratio of 30 (20 would be nicer in this inflationary era!).  If you look at the historic picture, you can see how this stock was hyped in the past - the point where the P/E ratio was over 400.  If you look at the corresponding earnings, profits, and EPS charts, you can see there is nothing in the metrics to justify these spikes in share price - profits and EPS remained flat.  Maybe the market was buying ahead of itself. Maybe someone was playing games.  It is instructive to ponder these charts and look at the historical trend.

Is Netflix dead?  Not yet - if it is earning money and generating profits.  So long as you make a penny more than your expenses, you can stay in business.  In reality, shareholders would revolt long before you get to that point - and insist you sell off the brand or merge or something.   We haven't reached that point yet.

Netflix may stay around for the long haul, but it will be a dreary one.  Silicon valley sells the dream of quick and astounding profits.  People go from college dropouts to millionaires and then billionaires, seemingly overnight.  But what ends up happening is that these "next big thing!" inventions become just mundane commercial transactions - if they succeed at all - with lots of competition in the marketplace and margins getting successively thinner and thinner.

So Netflix will soldier on - in this new streaming era, where there are now dozens of streaming services to choose from.  And I suspect that I am not the only one to sign up for each service, one month at a time (Disney is now offering discounts if you sign up for a year - they're on to us!).  But like Netflix, Disney has one or two interesting programs and then a ton of dreck.  It is all kiddie cartoons and old forgettable movies starring Dean Jones.

When it was just Netflix - with the STARZ contract - it was one-stop shopping.  Now we have choices, so instead of an Olympic-sized swimming pool, we jump from one kiddie wading pool to another.  I suppose you could sign up for all the services, but that would cost more than cable TV!

One thing plaguing Netflix is password-sharing.  I am not sure why this is a problem and why Netflix allows it - it shouldn't take but a few lines of code to realize that different devices are logged in to the same account at the same time.  My bank seems to know when I log in with a new device or even if I reset cookies on my computer.  So why Netflix even allowed password sharing in the first place is beyond me.

Oh, and be sure to hear the hue and cry of the anguished pirates once Netflix enforces its rules.  I mean, after all, if one person pays for the service and shares it with 100 other people, that's a big hit to revenue (although granted, many people viewing for free would never end up paying if service was cut off).

But content is the troubling part.  As I noted before, we watched this hyped "Bridgerton" series and it felt a lot like a "chick pic" as they call it.  I then realized it was based on a series of romance novels and hence why the plot was so meandering and repetitive.  If you haven't seen it, I will save you the trouble (spoiler alert!): Boy meets girl, boy hates girl, girl hates boy, blah, blah, blah, they fall in love, love conquers all, and finally get married, about three episodes after you've said "Enough already! Get a room!"  Season two is an identical repeat of season one.  One of the stars of season one noped out of season two, and I can't blame him.  Like any good soap opera, when a cast member asks for more money, they are written out of the plot.

I kept thinking, "I'll bet halfway through this season, they will reveal the whole plot line was a dream sequence!" - but I guess they are saving that for season three.  There are like eight books (and six "epilogues") in the series, so this nonsense could go on a long time.  Since any show basically jumps the shark after three seasons, I probably won't be watching more of it.  Watching the last episodes, I felt I was being manipulated - or at least they were trying to manipulate me - into watching ever-more episodes without moving the plot forward an inch (that is, until the last ten minutes of the last episode of the season when everything happens all at once!).

I watched it, because like any other good soap opera, you want to see what happens next.  And every episode, they don't advance the main plot one iota, but bring up all sorts of side-plots and red herrings just to keep you watching.  Like I said, I felt manipulated, which is why I was never into soap operas.

I digress a minute, but the show had one other annoying feature:  It promoted this false idea that you should hold out for "your one true love!" who was cosmically assigned by God.  Many a decent marriage and relationship has been destroyed by this idea - mostly sold to women - that "true love" is the most important thing in the world, and anything less than that is a sham marriage.  I mean, you watch this film and think, "Gee, maybe my life is a sham!  I never had heated glances across the ballroom with Sir Kensington!  I am missing out on so much in life!"  It is a destructive message to send to people.  Oddly enough, the protagonists in season 2 were from India - the land of arranged marriages - yet they were holding out for "true love" over any arrangement.  It didn't seem real.  But I digress.

Speaking of soap operas, though, do you remember the soap opera craze of the late 1970's and early 1980's?  College kids started getting into soap operas - previously the venue for middle-aged lower-class housewives.  It is sort of like our generation's fascination with professional wrestling - also seen as a lower-class low art for the trailer park set.  We've sort of dumbed-down our whole society, it seems.  Bridgerton isn't Sense and Sensibility, by a long shot, even if both have scenes where the hero rescues the heroine in a driving rainstorm so that she can do a coma scene.

Now granted, Netflix has a few movies here and there - but again, mostly stuff I already have seen or never want to see - much like the other streaming services.  I watched "Christine" again for the first time in 20 years or more.  This time I was rooting for the car.  When Christine ran over those bullies, I was not terrified at the thought of a demonically possessed car, but cheered by the thought of bullies dying a violent and painful death.  I guess over time, perspectives change.  But I am not sure that 30-year-old horror movies are worth $9.99 a month - even with the added "attraction" of mindless soap operas.

The downside for Netflix could occur if they keep losing subscribers.  I suspect the subscriber base will level off over time - indeed, you can't keep expanding your subscriber base indefinitely - that is physically impossible.  Once everyone who signed up has signed up, well, there is only one way to go - down.  If they lose subscribers - and revenue - then they don't have the cash to make expensive new drawing-room-dramas, and thus content suffers.  Poor content leads to more subscriber loss.  A recession would undoubtedly accelerate this trend, when people start examining monthly recurring expenses more closely.

The golden days of streaming are over for Netflix.  Now they have to do the down-and-dirty job of creating content to attract subscribers.  And sadly, this means that Netflix will no longer be the movie vault it once was, but just another television channel airing situation comedies and soap operas.

Les Moonves would be proud.

UPDATE:  Netflix announces that to "fix" the problem, they are adding commercials.  Oh, so it's free now?  Ha-ha.  This is like curing a toe fungus by shooting your foot off.  Maybe better content, less password sharing, and a better interface?

Nah - more commercials!  Netflix is now indistinguishable from Network TeeVee.

Gud-buy!  Won't be coming back, for commercials.

Thursday, April 21, 2022

ACP Hotspot After a Month... So Far, So Good

 

The long national nightmare is over..... we hope.

The Hotspot has been working well.  Last month, we used about 37 GB of the 100GB allotted, so clearly we have more data than we will ever need.  The price delta between the 30GB hotspot (Reg $35 a month, $5 with ACP) and the 100GB hotspot (Reg $55 a month, $25 with ACP) is $20, so it pays to buy more.  On the other hand, they have an annual 20GB hotspot plan for $300 a year, so 100GB seems to be the sweetspot in terms of data per dollar.  With the discount, however, the 30GB plan is slightly cheaper (at 16 cents per GB as opposed to 25 cents).  But then again, you are limited in terms of data.  The annual plan is not available (AFAIK) with the ACP program.

But there are other savings.  Our phones were on a $55 a month plan (with autopay, regularly $65 a month) which gave us 10GB each of hotspot and unlimited data.  For some odd reason, AT&T prepaid now has another plan for $75 a month with.... the same terms it seems.  AT&T prepaid is always changing their plans, so it pays to log on occasionally and see if another plan works for you.

However, by going to a $40 a month plan ($41.50 with taxes) with "only" 15GB of data, we cut our phone bills by approximately $30 a month, combined - going from $55 a month to $40 a month on each phone.  Since we have a ton of unused hotspot data from the new mobile hotspot, we can turn the WiFi on our phones "on" and use that data instead.  Upshot?   We end up paying $5 less a month overall, and getting a ton more data to use - for streaming movies (Netflix, YouTube), using the computer, the tablet, and the phones.  And since the hotspot is "on" all the time, it is no hassle to use it - everyone is automatically signed in, all the time, just like with a router.

We could save another $20 a month going to their $30 a month phone plan which provides only 5GB of data.  This seems a little thin, but I am going to investigate our usage next month and see how it works out.  If we always have the hotspot with us, well, we don't really need to pay extra for more data on the phone.

All of this did not happen without some pain, however.  I noted before the long hold times on the phone with AT&T and the mixups that happened, mostly because this is a new program.  When I started the hotspot, I had to call several times - hold times of an hour or more - to get things straightened out.  They had to make a manual $30 adjustment to my first bill.  But once it was all set up, things would be fine, right?

You do remember this is AT&T we're talking about, right?

Well, a month later, I get a notice that the mobile hotspot plan will renew for... $55.  I log onto the site and it shows "ACP Affordable Connectivity Plan discount applied!" but it isn't.  And AT&T charges my card $55, too! (with autopay, which provides no additional $10 discount with this plan).

So I called two days ago to their call center in Puerto Rico and the nice man tells me to disable auto-pay and then let the account expire for two days and then pay the bill on the 20th and the discount will apply.  It seems AT&T's billing cycle was on the 18th and the ACP discount was cycled for the 20th.

Now, this is where it gets weird.  Our new phone plans, at $40 a month, had NO hotspot data, just 15GB of data to use on the phone.  In the past, when we tried to use the hotspot service on the new phones, it would bomb out and say we were not authorized to use hotspot (naughty boy!) which is why we "upgraded" to the $55 a month plan in the first place.  But now I try it and... it works.  We watch the last episode of Bridgerton on Netflix (more on that later) and try not to fall asleep, using Mark's phone as the hotspot.

So today is the 20th, I log in to pay the bill and re-activate the mobile hotspot and.... it says the amount due is $55.  WTF?  It is supposed to be $25! And as if to mock me, it says, "ACP discount activated!"

So I call again, this time to an AT&T ACP number that they provide on their website because I guess there are a lot of angry people calling.  I try to remain calm - the idiot on the other end of the line can't do much more than read what is on the screen in front of me (and proceeds to do so).  He tells me the problem is with ACP and I need to call another number.  But this is an AT&T billing problem, not an ACP problem.   I ask him point-blank if the number he is giving me is an AT&T number and NOT the FCC's ACP program number.  Oh, no, he says, this is where you have to call.

So I call the number knowing full-well what is going to happen.  It is the FCC number and when I press "2" for billing issues and device issues, the recording says that I should contact my service provider.  I mean, I knew that already.  AT&T needs to screen its call center people better.  Carlos was just trying to get me off the line (and I think I talked to him a month ago with the same result!).

So I call back (this month, the wait times are less than two minutes at least!) and get Maria, who puts me on hold (after, of course, reading to me all the data on the screen that I am looking at).  She comes back with another idea.  Don't use autopay.  There is a glitch in their billing software that charges the full amount if you use autopay.  She suggests paying the $25 manually (you can make non-autopay payments in any amount, it seems) so I try it.

It works.  The $30 discount is applied and the mobile hotspot reactivates.  Maria you are a genius!  Carlos, you can go to hell.

It is a bit of a hassle to pay manually - I have to click on the bookmarked link, it logs in (the userid and password are stored) and click "pay".  And since it renews about the same time as my phones, I get plenty of reminders by text message.  Of course the ultimate reminder is the hotspot shutting down if I don't pay.  But once I click "pay" it re-activates almost immediately.

So, problem solved, sort of.  Autopay would be nice, but saving $30 a month is even nicer.  Well, $5 a month over the cost of our phones before - maybe $25 next month.

Is it worth it?  Well, recurring expenses are a big hole in most people's budgets.  $25 a month is $300 a year, and over a decade, $3000.  If you don't take the time to plug these little holes in your rowboat, they end up costing you tens, if not hundreds of thousands of dollars, over a lifetime.  Throw in compound interest and you'll really see what I mean.  Yes, it may seem like only $5 here or $10 there, but you can't look at it as saving only that, but the overall savings over time.  Is waiting on hold for an hour worth $300 - particularly when you are doing something else on the computer while you are waiting?   I don't think I ever made $300 an hour, lawyering.  Billed, maybe, not made.

It is distressing, but not unexpected, to see young people get upset because at age 25 they cannot afford the mini-mansion they grew up in (and neither could I!).   They argue that it is "unfair" that "boomers" chide them for buying avacado toast in a restaurant and paying $5 for a cup of coffee at Starbucks - as if these trivial expenses were what was keeping them back.

I used to think that, too.  My "minor" drug and alcohol expenditures weren't the reason I was bouncing checks - it had to be something else and preferably someone else's fault, right?  But with the perspective of time, I realize that when I was young I wanted a lot of stupid things now and was willing to pay for them later - with credit. What's worse, I spent way too much money on convenience foods and convenience items.

For example, when I was working at the hydraulics place, making $4.25 a hour, I would go to lunch with a friend and get one of those giant sub sandwiches at this great Italian deli and wash it down with a beer or two (and a bag of chips) and smoke a little pot.  I didn't realize that I was spending two hours of take-home pay just on lunch.  I could have brought a brown bag lunch from home for less than a dollar.

But when you are young, you don't think that way - that the costs of commuting to work could exceed an hour's labor.  That with taxes and "lunch" it may be 2 o'clock in the afternoon before you are actually making any take-home money.

If you want to accumulate wealth, you have to spend less than you earn.  So you have to fight like hell to find the best bargains - or learn to do without.  A regular fiber optic internet service (which is not available in my area anyway) is $129 to $169 a month.  Add in $75 a month per phone for AT&T cell service, and we're talking $300 a month - or more.  And those prices don't include "taxes and fees" which is why the actual bill always ends up so much higher.

Now granted, this is for top-tier high-speed access, which is nice if you have a 25-year-old bounce-back incel living in your basement, playing Grand Theft Auto all day long and you don't want him stabbing you with his katana when you serve him cold tendies.  But the rest of us have a life and don't really need 300 MPS data (which always has a * next to it anyway - "some restrictions apply").  So, for about $100 a month (maybe less, next month, when we switch to the $30 plan) we have what we need.

.I hear from people who spend hundreds of dollars a month on cell phones, cable television, and internet service.  And I'm glad they do.  You see, one of those naughty little add-ons to your phone bill, the "universal access fee" pays for my ACP discount.  So thank you for having the latest and greatest iPhone, which is "free" with your three-year contract.  We do appreciate it.

Of course, we could save $25 more by not having a hotspot at all.  But then again, there is such a thing as too stingy.  Whether we like it or not, internet access, just like phone access, has become an integral part of our lives - you cannot get a job, call for help, or so much of anything else, without it.

Which is why the government created the "lifeline" (so-called "Obamaphone" under Reagan) and ACP services - to make sure connectivity is available for everyone.


POSTSCRIPT: How the poor are supposed to navigate any of this is beyond me....

Wednesday, April 20, 2022

Collapse of the Gig Economy? (Re-emergence of the Gig Economy?)

After the last recession, people went to work on "side hustles" to make money.  Today, there is a labor shortage.  What will this mean for Uber, Lyft, Doordash and Grubhub?

A "tick tock" video making the rounds of the Internet, as well as a number of postings, photos, and testimonials, indicates that the "Gig Economy" may be finally melting down.  Sites (and that is all they are, websites) like "Door Dash" are squeezing their drivers as well as restaurant owners, and as a result, some drivers make little or no money on deliveries, unless you tip generously - on top of the delivery fee.  Why drive ten miles, burn gas and waste your time, for nothing?

As a result there are videos and photos of undelivered food - drivers just refuse to pick it up if there is no tip pre-paid on the order.  Customers are outraged as their food sits for hours (at which point, it is inedible) and eventually they give up and request a refund from DoorDash.   Maybe they need to get up off their lazy ass and make a meal at home.  But that's just me.  At age 62, I dearly wish I had every penny (and every pound gained) back that I spent on delivery and take-out foods.  No one will wish, on their deathbed, that they spent more time in the office.  They won't wish they ate more pizza, either.

I digress, but who orders McDonald's food delivered?  I mean, cold french fries and a $20 delivery fee?  I don't think so.  In the time it takes to do that, I could drive to the grocery store, buy food, take it home, and cook it.  Sheesh!   I feel no empathy for people who are ordering fast-food delivered and it doesn't get delivered.  If anything the drivers are doing you a favor!

What is going on here?  Well, I have some sympathy for the drivers, as I used to deliver pizzas, chicken wings, salads, and yes, even beer, when I was in college and doing several "side hustles" including working at UPS and Planned Parenthood.   For some reason, when I worked at Acropolis Pizza in Syracuse, the owner (or his brother, anyway) "Ari" would not pay us to deliver salads.  We got a portion of each sale as a delivery fee, in addition to our hourly rate, but not for salads.  So if two young girls on South Campus (as far as we would deliver to!) ordered two salads and didn't tip, it was a loss-leader.

One of the other drivers, who was South African (they called him "Chicken George" and he seemed to like that moniker - different times) always said, "Never deliver to South Campus!  They order CHEAP PIE, leave NO TIP!"

So yea, I get it - there is no point in losing money and wrecking your car, for nothing.

When the market crashed in early 2009 and everyone got laid off (remember extended unemployment?  Yea, we had that back then, too!) these "gig economy" things started showing up.  What they amounted to, as I have said all along, is exploitation.  Take some menial low-wage job, pay people under the table (as contractors) illegally to do it, don't bother with permits or insurance, disobey regulations and laws, and go big, fast.  Things like food delivery and taxi drivers - traditionally some of the lowest-paid jobs in America, were re-made as "apps" and a hefty sum skimmed off the top and sent to silicon valley.

Early on, when they were trying to "go big, fast!" they paid OK - and a lot of people got into it.  If you drove for Uber, you could make some decent money, but of course, you had to have a new or newer car and Uber would help you buy that.  So in a way it was chasing your tail.  You owned a car so you could work, and you worked so you could own a car.

But it got worse.  Over time, they hired more and more people and as a result, you had more and more "downtime" between rides.  And all these "Gig" economy apps changed their terms, each time making it a little less attractive to work for these companies.

A whole generation - the Millennials - gave up on careers and real jobs and ended up with multiple "gigs" that paid little and had no benefits whatsoever.  They must choke on their own vomit when they see their younger brothers and sisters getting real jobs that pay real money, doing Internet thingies - probably writing the "code" for the "app" that is exploiting their big brothers and sisters.

It doesn't end with apps.  Companies like Amazon and Walmart pay people part-time and as a result, you have to have multiple jobs (with conflicting schedules) to make ends meet.  And don't get me started on fast-food and retail.  There is no such thing as a career barista, but many folks seem to have no other choice.

Until the labor shortage.  I see now, online, ads for Uber, imploring me to sign up for the Gig economy.  I did sign up for Lyft as an experiment, but it just wasn't practical.   I live 10 miles from the city center, and many people want rides from the neighboring island (a 20-mile drive, but I could swim there in a half-mile, if not for the rip-currents).  So it would not really be profitable, and I would have to be "on call" for huge blocks of time to make it work.   I recall I saw only one ride request, and that was by a young lady who wanted a ride from a very bad neighborhood to the Dunkin' Donuts by the causeway.  I guess she worked there (or was very hungry) but the amount I would have made for driving 30 miles, round-trip wasn't worth it.  I noped out of Lyft - not that I was ever serious about it to begin with.

The "Gig Economy" model depends on an endless supply of desperate people - and today with inflation and the mass-retirement of the Baby Boomers, we are seeing fewer desperate people.  "No one wants to work anymore!" is the cry of the McDonald's franchisee.  No one wants to work for you is the real message, not at the shitty wages you are paying, not when someone else is paying more.

But labor shortages precede recessions, and we could be seeing a whopper of one in the coming years, unless we switch over to a war economy (which would make labor rates even higher).  If the economy does blip, well, more people will get laid off, and once again, they will seek out these "Side Gigs" to make ends meet.

Saaaay..... you don't suppose intentionally crashing the economy works in favor of certain companies and wealthy individuals, doya?  Probably not intentional, but the economic cycle of boom-and-bust tends to favor those who have, and screws those who do not.  It really screws those who are trying to get ahead.  Like I said before, I knew, personally, a lot of middle-class people in Florida who were buying-and-flipping houses in the early 2000's and making some money at it.  They thought their ship came in, but failed to see it was the Titanic.  A few smart or lucky ones (including me) thought it was too-good-to-be-true and got out in time.  The raging true-believers held on and lost it all.

But the people with real money scooped up the resultant foreclosure houses for pennies on the dollar and still own some of them today - or are selling them at inflated prices to chumps like you and me.  Look for another recession to take out the people paying premium prices today, who will be forced to rent from the Oligarchs who buy up the foreclosure properties the next time around.  I've lived through this twice, now.  The only hard part is in the timing - this shit could crash tomorrow or go on for a few more years.  It depends on so many factors - many of them emotional and psychological, not financial.

But I wonder if people will go along with this yet again.  When the market blips again (and they always do) and people get laid-off, will they be willing to swallow their bile and drive for GrubHub or Uber again?  Or will they realize the whole thing is an exploitative scam and said "fuck this shit!"

I am not sure what the answer is, only that many of these "side hustle" apps have yet to make dollar one. And many of them (meal kits, delivery services, online shopping) were enhanced by CoVid.  If the pandemic ends (and all pandemics end, one way or another) will people still want their groceries delivered?

I was at the "big" Walmart the other day and we left because the parking lot was full.  People were shopping in person, en masse.  Walmart recently set aside two rows of parking spaces for "curbside pickup" including our favorite space way out in the far corner (we need the walk!).  But most of them were empty.  And when we went to "Ghetto Gourmet" the blue totes of the "curbside pickup" pickers were all stacked in a corner and I only saw one picker and one car in the "pickup" zone (again, in our favorite spot near the pharmacy drive-through).  I never really understood the advantage of curbside pickup or having groceries delivered, unless you are an invalid.  But that's just me - I am so behind the times and out-of-it.

You connect all these dots and it seems that something is changing. Pandemic's over. People are going back to work and going out again.  Wages are up, and business models predicated on cheap labor are going to have trouble - big trouble - going forward.  And once your Micky-D's order sits for three hours without being delivered, well, chances are, you aren't going to order again (Is there really someone so desperate they would actually wait that long?  They would actually eat that food?  Gross!).

This does not bode well for the stocks in these "Gig Economy" companies.  But then again, they never were much to begin with - a website and an app, a business model calling itself "tech" when it was not "tech."

In 1969 we landed on the moon.  In 2019 our big tech accomplishment is delivering hamburgers.  Yea, something had to give....


UPDATE:  A reader notes that Grubhub was sold last year to investors for a tidy sum.  This year, they want to unload it, as the pandemic is over and sales are down.  This "tech" was never tech, and the business of delivering food is one of thin margins.  You don't get silicon-valley rich delivering pizzas!

Tuesday, April 19, 2022

Energy Drinks - Normalizing Unhealthy Habits

So-called "soft" drinks and energy drinks have normalized unhealthy habits.

Americans are unhealthy, and not because we don't have nationalized medicine.  This is not to say our medical system is perfect, only that it is hardly the Dickensenian dystopia our European friends imagine it to be. Even the poorest of Americans (particularly the poorest of Americans) qualify for Medicaid. Retirees and the disabled qualify for Medicare.  And those in-between qualify for Obamacare or can afford their own health insurance.  Sure there are issues  - such as the gap in coverage between the very poor (below the poverty line) and Obamacare - in States where cold-hearted Republicans refused to expand medicaid.   But the bottom line is, no one is actually paying these staggering medical bills you read about online.  A poor person with a $100,000 ER bill from their motorcycle accident simply declares bankruptcy - a luxury that Student Loan borrowers don't have.  Do I feel sorry for that guy?  Well, he did own a motorcycle and thousands of dollars of tattoos.  Guess he couldn't afford $100 a month for Obamacare.

But I have digressed already.   I go to the local hospital once a year for a "checkup" and blood tests, because that's where my doctor's office is located - in the heart of the Death Star.  And when you go  there, you see a lot of unhealthy people, most of whom have health problems that are self-inflicted.  If you go to the local Walmart, you see why.  A guy in an electric wheelchair with one leg missing due to diabetes, is putting 2-liter bottles (like six of them!) of Mountain Dew in his grocery basket, filling the rest with potato chips and snack cakes.

We've known for centuries that rich foods and sugary foods are not healthy.  But for some reason, in the last few decades, over-consumption of bad foods have become normalized.  When I was a child, a Coke or Pepsi came in 6.5 ounce bottles or at worst, a 12-ounce can.  Over the years, the soda wars have escalated. Pepsi started it all way back in the 1930's with the 12-ounce serving, arguing their soda was a better value than Coca-Cola's paltry 6 ounce offering.  Such a deal, for a nickel!

I still remember the day, back in the 1990's when we were young and thin (-ish) that Mark came home and announced that the 7-11 now had something called a "big gulp!" that ran up to 44 ounces - a literal bucket of soda.  Back then, we were young (-ish) and dumb (not-ish) and did stupid things like go to convenience stores to buy soda pops.  And we bought big (-ish) big gulps (not ever the 44 ounce, as I recall) and gulped them down (as the name implies) and never thought about the long-term consequences.

It is akin to smoking.  At one time in this country, nearly everyone - it seemed - smoked.  Smoking was "normal" and anyone who was against smoking was seen as some sort of kook.  How can smoking be bad for you?  After all, the consequences weren't felt until later in life - at a time when people were not in general circulation anyway.  So a 20-something smokes and thinks nothing of it.  They will live forever.

The same is true for sugary drinks and other aspects of the American diet.  When I was younger, I thought nothing of buying the occasional candy bar.  Need a pick-me-up at work?  A Coke and a Clark bar to the rescue - 400 calories and most of it sugar.  Yea, that woke you up, the way cocaine wakes you up.  Then you crash - so you repeat the process.

Energy drinks came along at a time when I sobered up with regard to soda pop.  Most energy drinks are just concentrated soft drinks - but loaded with even more sugar (or worse, high-fructose corn syrup) and lots and lots of caffeine.   But they are sold as being "healthy" and providing you with "energy" so they must be good for you, right?  The gym rats at the gym all drink energy drinks, and look what great shape they are in!  But again, the effects take decades to be realized and just because something doesn't make you drop dead right away doesn't mean it is healthy.

What is interesting to me is how these things became norms.  The energy drink people didn't sell us energy drinks, but the idea of energy drinks and that they were "normal" and desirable.  Oddly enough, they became popular not so much with health fanatics but with late-night partygoers and ravers, who would run out of energy after being wired on Ecstasy and dancing all night long.  A quick shot of Red Bull and you've got wings, right? They created a normative cue that it was alright to do this.

Alcohol, of course, falls along the same lines.  Drinking beer is a norm for younger folks, who later morph to wine and cocktails as they get older.  Getting really drunk is a norm for college kids, and even as they pray to the porcelain throne and promise to God never to drink again, within a day or two they are having another beer.

Oddly enough, alcohol isn't far removed from the sugars that make soft drinks bad for you.  I had to laugh the other day when a bartender (of all people) tried to tell me that drinking Vodka was good for you as it had no calories (after all, it is clear, right?).  I laughed and told him, sorry, but alcohol does have calories, indeed about 100 per serving - at least what we used to call a normal serving.  Like soft drinks and fast food, serving portions have increased over the years.

At one time this was considered to be fat....

I am not sure what the point of all this is, other than to realize that what we think of as "norms" are often abnormal or self-destructive things.  The television cartoon The Simpsons has been on the air a record 30 years or more.  In an early episode over two decades ago, Homer decides to go on disability so he can "work from home" - another normative cue that has changed over time.  To become disabled, he decides to gain weight and become morbidly obese - a whopping 300 pounds! That was considered to be alarmingly obese back then.  I see a dozen people who weigh that much every trip I take to Walmart or indeed, anywhere these days.

Our norms have changed.  Not suddenly so as you'd notice them, but slowly over time.  It is only in looking back in time that we realize how dramatic these changes have been.  Somehow, we've allowed ourselves down this road to unhealthiness in America and maybe the world.  We've made a norm of over-consumption.  Soft drinks, once an occasional treat for the children, are now adult beverages served at breakfast.

Yea, that.  When I was younger, I thought nothing of going to McDonald's to eat.  And I remember it was a big deal when they started serving breakfast.  Breakfast at McDonald's?  How weird!  But we got used to that pretty quickly.  Needless to say, though, I jumped out of my shoes the first time I saw someone order a McMuffin with a Coca-Cola at 8 O'clock in the morning.   Soda-pop for breakfast?  That's just not right.  But somewhere along the line, people started doing this, or more precisely, no one told them it was wrong, weird, or bad for their health - probably by design.

It is akin to the opioid epidemic, which can be traced to one letter to the editor of a medical journal where the author - without any citation or evidence - opines that maybe opiates are not as addictive as first thought and that doctors should not be afraid to prescribe them for ordinary pains and aches.  Dozens of medical journal articles later - many citing that letter to the editor as "proof" that opiates are non-addictive - we have an opioid crises, which profited certain people in the medical industry greatly and impoverished and killed hundreds of thousands (if not millions) of people in the process.

You see how this works.  It's psychology and marketing.  They convince us to do things that are contrary to our own interests by saying, "heck, everyone's doing it!" - sort of like how a teenager justifies his bad behavior to his parents -  "All the other kids are doing it, why can't I?"

I guess that is why my mantra here has been act rationally in an irrational world  - a world irrational by design.  It is only after you've lived a life that you realize how much of what you thought were original ideas of your own are, in fact, suggestions made to you by others.  I fell into the soft-drink trap and it took me years to bail out of it.  I fell into other traps - health traps, financial traps, psychological traps - and like any trap, they are easy to get into, but often require you gnaw a leg off, to get out of.

So maybe there is a point to this.  If you can spot these traps early on, you might save yourself a lot of grief.  I recall that my parents warned me about drinking too much soda pop (yet the bought those two-liter bottles of the stuff, when I was a teenager).  My Dad always told me to "save my money" but never got more specific than that.  Deep down, we know when we are doing things that a bad for us - that little angel on our shoulder, our conscience, tells us so.  But we talk over him and listen to the little devil instead.

It pains me to watch some of these folks who listened to the little devil.  You can see they are going to be - or are in - a world of pain and discomfort - and there isn't much we can do about it.

Perhaps the only thing is to learn from it.

Monday, April 18, 2022

Stock Price Manipulation - Another Sign of the End Times?

When markets become little more than casinos, we are in trouble.  When they become rigged casinos, we are really, really in trouble.

Recently, Elon Musk violated SEC rules by buying more than 5% of Twitter stock without disclosing his buy to the SEC.  The theory is, if someone is buying up a company, the rest of the world has a right to know - before they sell or buy the stock themselves.  By failing to disclose his purchase, he picked up the stock at a lower price than he would have, if people knew he was buying.

But it gets worse than that.

The SEC fined him a trivial amount - compared to the tens of millions he stands to make.  It is like that pump-n-dump kid from New Jersey back in the 1990's.  When the SEC fined him a hundred grand, his only reply was, "do you take a check?" because he made far more than that, pumping penny stocks.

But it gets worse than that.

Musk then went on to say he wanted to take Twitter private with an offer of $54.20 (get it? 420 - as in "smoking pot!' tee-hee!).  He used the same "420" gag when he pumped up Tesla stock a few years back, claiming there was a "firm" buyout offer (there was not) and again, he was fined a trivial amount by the SEC.  Well, not trivial to us mere mortals.  A rounding error to Musk.

Of course, the buyout was a canard.  The major shareholders, including some Arabian investment funds, said "no thanks!" to Musk's offer.  So it is going nowhere.  To top it off, Twitter enacted a poison pill provision, so the whole thing is dead in the water.

So, Musk failed?  Hardly.  Once his "buyout" offer of $54.20 a share came out, well, the price of the stock went up even further.  So at this point, his initial investment to buy 9% of Twitter has increased in value by tens of millions of dollars.  How did he do this?  He made a few Tweets.

Now, before you get all up in arms about this, bear in mind that the people who bid up the price of Twitter stock (and Tesla stock, before) were not the savvy investment bankers on Wall Street (and if they did, who cares about them?) but rather retail investors who watch television and financial channels and think, "That Space Jesus guy is alright - he knows what he is doing!  I'll buy $500 of Twitter stock tomorrow!"  And by doing so, the "last idiot in" sets the stock price - not the whale investors.

Was the whole "Twitter buyout" thing a fraud from the get-go?  Well, it certainly looks like it and a lot of other people such as Mark Cuban (himself a piece of work) have made similar noises.  It is a pretty obvious play.

Win or lose, Musk makes money - with little effort on his part.  Actually, "losing" ends up being more profitable than winning, as actually taking Twitter private and trying to run it to make a profit would be hard work - and the profits thin.  Yes, Twitter isn't profitable quite yet - although it has shown some profits in some quarters back in 2018 and 2019.  So Musk would be better off losing his bet and then selling the stock - at a nice profit, of course.

Or not selling.  If you sell stock, you have a capital gain and you have to pay taxes on it - particularly short-term capital gains, which are usually taxed at a higher rate (it used to be 25% versus 15% which is quite a spread!).   So how does Musk make money if he doesn't sell?

Well, that's an interesting question and maybe one way the mighty Musk empire may crumble some day.  Much ink was spilled a few years ago how Elon Musk and other Billionaires don't pay any taxes, even as they made a lot of money. The way they avoided - or at least delayed - taxes was perfectly legal.  You only pay capital gains tax on a realization event - the sale of a stock or other asset, for example.  So if you buy $1000 worth of stock and it goes up in value to $2000 you have no taxable income until you sell that stock and realize the gain.

But you know, the Ferrari dealer doesn't accept stock as payment.  So what you do is borrow against your assets, which at the low, low interest rates of the last few years, was rather attractive.   Banks were eager to loan Billionaires the money as they had "blue chip" stocks to use as collateral.  Hey, Tesla stock is a sure thing, right?   So you borrow against it, pay 1-2% interest on the loan and pay no taxes.  Seems pretty simple - you don't pay taxes on loans, as loans are not "income."

(I digress, but this is why Biden and other Democrats are proposing a Billionaire's tax to force people who make over a hundred million a year to pay taxes on gains, even if there is no realization event.  Sounds appealing to the folks in the cheap seats, but it would be a nightmare to tax unrealized gains and keep track of them (and losses as well!) over the years.  The only people making money off that are tax attorneys!)

Of course, Musk had to sell some stock last year - likely to make payments on those loans.  But the amount he sold was trivial (to him, anyway) and even if taxes were paid, likely they were far less than the amount he would have paid if he sold stock to raise money instead of borrowing against the stocks.  As we learned in law school, a tax deferred is a tax denied.  Hence the beauty of the 401(k) and IRA - you have 30 years to play with Uncle Sam's money before you have to cough it up in taxes - and often at a lower rate as well.

And even us little people can play this game, too.  For example, some folks have life insurance policies with loan provisions.  You go to retire and instead of paying taxes on your life insurance policy (by cashing out) you borrow against it instead.  Provided the interest rate is fairly low (mine isn't - 8%!) it might be a better deal than paying income tax.  For a large policy, if you cash it out, it could put you into the highest brackets.  Since this play doesn't work for me, I plan on just cashing those dividend checks and when I die, the insurance payout will go to my next of kin.   But I digress.  Yet again.

There is a small problem with this borrowing-against-assets model, however - and that is all loans have to be repaid, eventually.  If you can keep the loan going until you die, well, you may avoid the tax-man, at least during your lifetime.  But even at 1-2% interest rates, the cumulative interest could add up to quite a sum.  And with interest rates going up to 5% or more, well, it could get messy.  And you can bet your britches these asset loans are variable-rate and callable as well.

Margin players run into this all the time.  You want to make a killing short-selling "Gamestop" stock, so you buy an option to sell the stock at a lower price later on.  Problem is, most brokerage houses want some sort of collateral backing up your option in case it goes horribly wrong.   So you pledge your investment portfolio as collateral and place your bet - literally - on where the stock price is going.  Then some idiot on Reddit decides to encourage small investors or "apes" to buy single shares of Gamestop, driving the price UP even as the company circles the drain.  Again, share prices are not rational - they are often emotional.  The last idiot in sets the share price.

So your option comes due and you have to buy those shares you shorted - at a much higher price - to sell them at the low price you agreed upon.  You are out hundreds of thousands of dollars - maybe millions if you are some hedge fund manager.  The brokerage house then sells your other stocks to make up the difference.  Since they are selling off huge chunks of stock, the price of those tanks, which means they have to sell even more.  Shit like this can cause markets to crash.

Now apply this to the Musk scenario.  If he has borrowed against his holdings (as so many Billionaires do to avoid paying taxes) and the loans come due or are called or the interest rates skyrocket, then the Billionaire has to sell off shares to make payments on the loan.  Selling off big chunks of stock depresses share price.  The "founder" of the company selling off big chunks scares the crap out of the market.  So he has to sell even more to pay off his bills - and it snowballs downhill from there.

Borrowing is leveraging, and levers are simple machines.  "Give me a big enough lever and I can move the world," Archimedes supposedly said.  A small force on one side can cause great movement on the other.

So, I could see a scenario where even a high-flying Billionaire could end up broke, over time.  With all the electric cars hitting the market right now, can Tesla survive?  Studebaker pioneered the compact American car market in the late 1950's and had the market to itself - and was profitable for a few years.  But by 1960, the "Big-3" came out with compact cars of their own, and Studebaker was history.

Tesla is Studebaker.

You're Gimbels, Marge!

But what about solar city?  Home storage batteries?  SpaceX?  Surely they will keep Musk afloat, right?  Well the Solar City deal turned out to be a nightmare for Tesla and people have accused Musk of insider dealing as a result.  Cheap Chinese solar panels - even with Trump tariffs - have flooded the market.  Changes in solar panel subsidies have made home solar a non-starter. And as for home battery packs, well, anyone can make a lithium-ion battery pack.  There are no moats here.

And as for SpaceX, well, one Challenger incident is all they need to see a major blip in their revenue.  Since SpaceX is privately held (by Musk) we have no real idea if it is even profitable.  And quite frankly, given the fast-and-loose way SpaceX plays, I suspect such an incident might occur in the near future.  Space exploration is a highly dangerous business, no matter how you slice it or how cool your "space suits" look.  You are sitting on a tower of volatile fuels, blasting off into a near vacuum where death is all around you, returning to earth in a fireball of flame.  What could possibly go wrong?  It is like air travel but 100 times more complex and dangerous.  So long as everything works perfectly, no problem.

What will happen is anyone's guess.  But the overall thing that concerns me is that this sort of stock manipulation by tweet isn't creating any real wealth.  It is just rearranging money and gambling on stock prices going up or down because people believe them to be so.  Profit and loss are a thing of the past, we are told - and were told the last time "dot com" melted down.  That Billionaires can get away with such blatant manipulation of the market will cause ordinary investors to lose faith in stocks.  And as I noted in an earlier posting, the whole market for investments (or any market) is based entirely on faith.

Yes, the value of the dollar is based on a communal understanding and agreement that we all think it is worth something.  The same is true of Bitcoin, the problem for Bitcoin is far fewer people believe in it, and given its volatility and history of fraud, theft, and abuse, it doesn't seem like the majority of us will give it much faith in the future.

(I digress yet again, but Musk made another killing by saying Tesla was going to accept Bitcoin as payment and was buying Bitcoin.  The price of Bitcoin went up, Musk sold out, made tens of millions of dollars just for a few Tweets.  Pump... and Dump.   You know, Trump should take lessons from this guy!  Trump never made a nickle from a Tweet!)

When the whole stock market seems like a rigged game for Billionaires to play, what's the point in playing?  Many small "retail" investors - who do drive these stock spikes - will become disillusioned and turn away from the circus.   Or perhaps not.  Perhaps they will just stop buying stocks as they run out of money to throw at these things, as the cost of living skyrockets and they get burned one too many times by a "sure thing" investment.  Once your victims are bled dry, there is nothing to be gained from bleeding them further.

And it could happen in a very, very short period of time.  We saw this in 2008 when overnight, it seemed, people when from being crazy about owning houses to wanting to unload them at any price - or simply walking away from them and defaulting on their mortgages. Something highly coveted and valued one moment, worthless the next.  And this took out the mortgage-backed securities underlying all these deals, which in turn took out the greater market, as again, many were forced to sell due to margin calls and the like.

It is sad, but Elon Musk didn't make money by making electric cars or rocket ships - those were made by the employees and engineers of Tesla and SpaceX.  Musk made money by taking the fortune he started with and then leveraging it time and time again, to make more money.   It is a way to end up with Billions, of course.  But leveraging works both ways.  When all their wealth is tied up in stocks and they owe as much in loans, they may not be as wealthy as it may appear.

Think of it this way:  In 2008, we had middle-class people who owed $250,000 on their house, which was "worth" $500,000 due to the bubble market.  They also had a portfolio of mutual funds in their 401(k) worth $500,000.  On paper, you might argue they are millionaires, but for the mortgage.   But when the shit hit the fan, the house was worth less than the loan balance, and their 401(k) dropped by more than half as well.  Turns out they were insolvent the whole time.

Now take that model and add a few zeros to the numbers and you've got Elon Musk or any other modern Billionaire.