Ward has started a new series on my CoffeeCrispLite blog
Click here to go there.
Wednesday, June 3, 2009
Friday, May 22, 2009
Could you get a Canadian credit card?
Credit card companies are actually looking at what you buy to determine if you are a good credit risk. Does it work? Buy me! Get credit!
a. cheap, generic automotive oil.
b. expensive, name-brand automotive oil.
2. Do you have a carbon-monoxide monitor in your home?
a. No.
b. Yes.
3. Do you use those little felt pads that stop chair legs from scratching the floor?
a. No.
b. Yes.
4. Have you ever bought a chrome skull car accessory?
a. Yes.
b. No.
c. Huh?
4. Have you ever bought a Mega Thruster Exhaust System?
a. Yes.
b. No.
c. Huh?
5. Do you buy birdseed?
a. No.
b. Yes.
6. Do you buy snow-rakes?
a. No.
b. Yes.
c. What?
How'd you do? The more b's you answered (or c's), the more responsible Canadian Tires thinks you are and the more likely you are to get their credit card. So the next chrome skull accessory you need would be best purchased with cash.
For the complete article, click here.
Friday, March 27, 2009
Will you witness the end of an era? PART 1a
Why we hand bankers the reigns
Yesterday we talked about the different economic type classes that run society and how they change over the years. According to the scholar who came up with this, the United States has been in an Acquisitor Era since the founding of the country. That's a long time, and it's no wonder so many Americans believe the only right way to run our society is by letting those lead who are monetary experts.
So we have been approving of super-large compensation for bankers, CEOs, and others who drive the economy. But it's because we hold onto a theory that acquisition is the only way for our society to thrive, hence, it's important to keep the talent that know how to acquire. Maybe it's a theory. Maybe it's a myth. It would be unnerving to make the change and find out (but I'm willing).
Today I read that the CEO of Canada's largest insurance company, Manulife, got a $25 million dollar comp package. Half came for doing an outstanding job last year, and half for staying the five months from now until his retirement. Manulife must have done awesome. Let's check. Manulife lost 1.9 billion dollars last quarter. Yup, that's billion, and that's quarter. The stock lost 70% last year. Granted, stocks in the financial sector have done poorly and tend to move in tandem but still . . . dogs.
The shareholders launched an appeal. But, DE-NIED!
High ranking executives have always been obscenely paid. Now that time are bad we can see just what these executives may have always been thinking: did they pay themselves well for good performance? Or were because they believed what they did was just so darn important that win or lose, they deserved a lot of money just for being there.
A footnote, the CEO agreed to convert $10 million of that money into company stock. A fine sacrifice.
Yesterday we talked about the different economic type classes that run society and how they change over the years. According to the scholar who came up with this, the United States has been in an Acquisitor Era since the founding of the country. That's a long time, and it's no wonder so many Americans believe the only right way to run our society is by letting those lead who are monetary experts.
So we have been approving of super-large compensation for bankers, CEOs, and others who drive the economy. But it's because we hold onto a theory that acquisition is the only way for our society to thrive, hence, it's important to keep the talent that know how to acquire. Maybe it's a theory. Maybe it's a myth. It would be unnerving to make the change and find out (but I'm willing).
Today I read that the CEO of Canada's largest insurance company, Manulife, got a $25 million dollar comp package. Half came for doing an outstanding job last year, and half for staying the five months from now until his retirement. Manulife must have done awesome. Let's check. Manulife lost 1.9 billion dollars last quarter. Yup, that's billion, and that's quarter. The stock lost 70% last year. Granted, stocks in the financial sector have done poorly and tend to move in tandem but still . . . dogs.
The shareholders launched an appeal. But, DE-NIED!
High ranking executives have always been obscenely paid. Now that time are bad we can see just what these executives may have always been thinking: did they pay themselves well for good performance? Or were because they believed what they did was just so darn important that win or lose, they deserved a lot of money just for being there.
A footnote, the CEO agreed to convert $10 million of that money into company stock. A fine sacrifice.
Thursday, March 26, 2009
Will you witness the end of an era? PART 1
Dr. Ravi Batra, author, and Professor of Economics at SMU wrote a book in the eighties called The Great Depression of 1990. People must have been scoffing at it during the go-go nineties, but a lot of Batra's predictions are now coming true. He was just off by 17 years.The book is an interesting read for its "backyard" style chats about how a capitalist economy works. But it also talks about social classes through history and how this "great depression" could move us into a new class age. His theory is borrowed from another scholar and, in a nutshell, goes like this:
People fall into one of four social classes depending on their particular strength. Every class has it's day, or, it's Era. The Laborer Era is run by people who shun authority and have no need for high ambitions. Batra cites prehistoric man; I picture a hippy commune. But not everyone feels that way and the desire many have for a more managed community opens the door to . . .
. . . The Warrior Era. This age is run by armies and royalty who exercise absolute power. It's the age of Xena, Pharohs and Kings. Eventually the domination becomes onerous and the disorder caused by constant war leads to . . .
. . . The Era of Intellectuals. The time when religious leaders take over, and no, that's not an oxymoron. Eventually the religious leaders become too manipulative and turn away from spiritual truths for ego and power. The masses see through them and start to demand rights for individuals. And so you get . . .
. . . The Era of the Acquisitors. Society is now run by those who know how to get rich: bankers, merchants, landlords, ball players. Sound familiar? It's where we are now, and before you think you're living in the good times, it has its problems like all the others. The credo of individual rights get misused to keep the rich, rich. All things become commercialized. And rich does not necessarily = moral, yet the rich rule.
Eventually, the gap between rich and poor becomes too great. The people rebel, and the next Era begins. Is that where we're heading now?
Sunday, February 22, 2009
Not my inflation index , or, The price of a 6 pack
Did you feel last year's 3.85% inflation rate? Not me. I felt something worse than that. Last January my budget sheet showed I spent $300 a month in groceries. At 3.85%, that would make this year's monthly grocery bill $311.55 but it isn't. It's closer to $400.
So it may be the government's inflation index, but it's not mine. And probably not yours either. The Bureau of Labor Statistics consider the regular price in the index, but many people don't shop that way. We use coupons, hunt for sales, stock up on specials, and browse resale shops and Craig's List.
Example: I keep a supply of Coca Cola in the house -- 1/2 liter 6-packs. For years I stocked up on sale, and there was always a sale somewhere. I rarely bought the product for more than $2.50 a pack. Early last year my limit had to increase to $3.00, then later in the year I couldn't find Coke 6-packs on sale anywhere. Saturday I got some at Kroger's for $4.25, and that was a deal.
The same thing is happening with dishwasher detergent, cheese, orange juice, eggs, and some of the frozen meals I keep on hand for when I'm too tired to cook.
My biggest concern is that even if we experience deflation this year, is there motivation for food and household goods companies to lower their prices? I don't have to buy a new couch but I do have to eat. Moreover, I'm worried that some of my favorite foods will disappear -- the ones that cost more, but are made with real ingredients and no chemicals.
So it may be the government's inflation index, but it's not mine. And probably not yours either. The Bureau of Labor Statistics consider the regular price in the index, but many people don't shop that way. We use coupons, hunt for sales, stock up on specials, and browse resale shops and Craig's List.
Example: I keep a supply of Coca Cola in the house -- 1/2 liter 6-packs. For years I stocked up on sale, and there was always a sale somewhere. I rarely bought the product for more than $2.50 a pack. Early last year my limit had to increase to $3.00, then later in the year I couldn't find Coke 6-packs on sale anywhere. Saturday I got some at Kroger's for $4.25, and that was a deal.
The same thing is happening with dishwasher detergent, cheese, orange juice, eggs, and some of the frozen meals I keep on hand for when I'm too tired to cook.
My biggest concern is that even if we experience deflation this year, is there motivation for food and household goods companies to lower their prices? I don't have to buy a new couch but I do have to eat. Moreover, I'm worried that some of my favorite foods will disappear -- the ones that cost more, but are made with real ingredients and no chemicals.
Friday, February 20, 2009
Are you impressed?
The experts don't impress me. They didn't when 98% of stocks had "buy" ratings (which we now know was often to influence sales), and they didn't when we were told this fall that stocks are a bargain. Experts have too much reputation at stake, and too many friends in high places.
For instance, when gold was in the $800's an ounce range, most experts predicted it would go up this year but few offered a target higher than $1,050. Meanwhile the non-experts I read were predicting $1,500 to $10,000. Those are outrageous targets. If an expert goes that high and it doesn't come to pass, he or she will look like a fool. But, if the expert calls $1,050 and gold goes to, say, $2,000, the expert can say they called it, but didn't go high enough. Now they are still a genius.
Philip Tetlock has some similar views of experts. The professor of organizational behavior at the University of California was interviewed for a CNN article titled: Why the experts missed the crash. So why was it, Professor Tetlock?
Greed and arrogance.
Wow. Who would have thought.
The websites I follow largely belong to people in the business who offer the insider opinion. Listening to these folks, I moved out of equities in December/January and into mining stocks. Maybe I just got lucky this time around, but my 401k recovered 40% of what it lost from its peak in 2007, and did it in about 7 weeks.
Not everybody with a blog deserves to have you listen to their advice. Tell us, professor, what do we look for?
"The better forecasters were . . . self-critical, eclectic thinkers who were willing to update their beliefs when faced with contrary evidence, were doubtful of grand schemes and were rather modest about their predictive ability."
"The less successful forecasters . . . tended to have one big, beautiful idea that they loved to stretch, sometimes to the breaking point. They tended to be articulate and very persuasive as to why their idea explained everything."
To our detriment, it's the second type of forecaster that the media likes to quote.
Tetlock said he likes Mark Zandi (Economy.com), and Larry Summers (head of the National Economic Council. I'll be looking these guys up.
And by the way, we should all temper our own enthusiasm when we pick investments so that we ourselves don't fall into the less successful forecaster group.
For instance, when gold was in the $800's an ounce range, most experts predicted it would go up this year but few offered a target higher than $1,050. Meanwhile the non-experts I read were predicting $1,500 to $10,000. Those are outrageous targets. If an expert goes that high and it doesn't come to pass, he or she will look like a fool. But, if the expert calls $1,050 and gold goes to, say, $2,000, the expert can say they called it, but didn't go high enough. Now they are still a genius.
Philip Tetlock has some similar views of experts. The professor of organizational behavior at the University of California was interviewed for a CNN article titled: Why the experts missed the crash. So why was it, Professor Tetlock?
Greed and arrogance.
Wow. Who would have thought.
The websites I follow largely belong to people in the business who offer the insider opinion. Listening to these folks, I moved out of equities in December/January and into mining stocks. Maybe I just got lucky this time around, but my 401k recovered 40% of what it lost from its peak in 2007, and did it in about 7 weeks.
Not everybody with a blog deserves to have you listen to their advice. Tell us, professor, what do we look for?
"The better forecasters were . . . self-critical, eclectic thinkers who were willing to update their beliefs when faced with contrary evidence, were doubtful of grand schemes and were rather modest about their predictive ability."
"The less successful forecasters . . . tended to have one big, beautiful idea that they loved to stretch, sometimes to the breaking point. They tended to be articulate and very persuasive as to why their idea explained everything."
To our detriment, it's the second type of forecaster that the media likes to quote.
Tetlock said he likes Mark Zandi (Economy.com), and Larry Summers (head of the National Economic Council. I'll be looking these guys up.
And by the way, we should all temper our own enthusiasm when we pick investments so that we ourselves don't fall into the less successful forecaster group.
Wednesday, February 18, 2009
Less can be more, so relax.
An article in Yahoo Finance by Aaron Task warns: "Worst Is Yet to Come:" Americans' Standard of Living Permanently Changed. I beg to differ. Our standard of living will only go down if all you count is number of possessions, bells and whistles, and the level of pampering from service reps. In other words, the "spoiled" factor.
(I am aware this pertains mostly to the middle and upper classes. I can't estimate about the working or working poor. Will they be in for more of a struggle, or will the lessening of the wage gap actually help by lowering prices and evening out the playing field?)
Even the article's interviewee, Howard Davidowitz of Davidowitz & Associates said that the end of rampant consumerism is ultimately a good thing. We all recite the mantra that money doesn't make you happy. Then we put our blinders back on and plow ahead into the material world trying to gain more ground. Maybe once the high standards of the American dream relax, we all can too.
I forget where I read it, but a social scientist wrote that we set our standard of living according to what the others around us have and do. Apartment living was fine with me when I lived in Toronto, was younger, and all my friends lived that way. When I moved to Raleigh and was older I wanted a house. My first house was surrounded by young Yuppies who tried to convince me to buy a Lexus. My second house was surrounded by old downsizers who knock on my door to tell me when CVS has a sale on toilet paper. I do see a difference in the things I thought I needed between neighborhood 1 and neighborhood 2.
Okay, one more story. Years ago an acquaintance told me she spent a summer in eastern Europe helping in a relief program. She lived out of a backpack with one pair of jeans and two tee shirts and by summer's end she didn't know why she ever needed more than that. Then she came home and didn't know how she got along without an ever expanding clothes closet.
I hope to all reading this, you'll stay solvent and find the tons of joy in the non-material.
(I am aware this pertains mostly to the middle and upper classes. I can't estimate about the working or working poor. Will they be in for more of a struggle, or will the lessening of the wage gap actually help by lowering prices and evening out the playing field?)
Even the article's interviewee, Howard Davidowitz of Davidowitz & Associates said that the end of rampant consumerism is ultimately a good thing. We all recite the mantra that money doesn't make you happy. Then we put our blinders back on and plow ahead into the material world trying to gain more ground. Maybe once the high standards of the American dream relax, we all can too.
I forget where I read it, but a social scientist wrote that we set our standard of living according to what the others around us have and do. Apartment living was fine with me when I lived in Toronto, was younger, and all my friends lived that way. When I moved to Raleigh and was older I wanted a house. My first house was surrounded by young Yuppies who tried to convince me to buy a Lexus. My second house was surrounded by old downsizers who knock on my door to tell me when CVS has a sale on toilet paper. I do see a difference in the things I thought I needed between neighborhood 1 and neighborhood 2.
Okay, one more story. Years ago an acquaintance told me she spent a summer in eastern Europe helping in a relief program. She lived out of a backpack with one pair of jeans and two tee shirts and by summer's end she didn't know why she ever needed more than that. Then she came home and didn't know how she got along without an ever expanding clothes closet.
I hope to all reading this, you'll stay solvent and find the tons of joy in the non-material.
Tuesday, February 10, 2009
Monitoring the DEW-Line
Because that's just the kind of nice guys we are:
Starbucks realizes how hard these economic times are on the customer so they are offering special two-fers. $3.95 will get you a tall latte with a coffee cake, or, a regular coffee with a breakfast sandwich.
That's a good deal. We'll probably take advantage of it soon. But come on, isn't Starbucks itself the real economic victim that this new deal is trying to help?
We honestly thought you wouldn't notice:
Beware of ads sprinkled in with your CitiBank Account Activity. The Consumerist reports a user who saw line items which looked liked charges, but were really links to advertisers. Ninety-one percent of their readers who voted in a mini poll thought it was "very uncool". The other 9% are probably Nigerian telemarketers.
Why don't Saskatchewaners like summer?
If you're looking for one place where the economy has actually been growing, try www.saskjobs.ca . The Premier of this western Canadian province is calling Canadians to come for the jobs. I checked, and lots of those jobs are in mining, agriculture, and places named "Moose Jaw". But if you can stand the cold and like living in sparsely populated places, give it some thought. Oh, and Saskatchewaners don't like summer because it's two weeks of bad snowmobiling.
Starbucks realizes how hard these economic times are on the customer so they are offering special two-fers. $3.95 will get you a tall latte with a coffee cake, or, a regular coffee with a breakfast sandwich.
That's a good deal. We'll probably take advantage of it soon. But come on, isn't Starbucks itself the real economic victim that this new deal is trying to help?
We honestly thought you wouldn't notice:
Beware of ads sprinkled in with your CitiBank Account Activity. The Consumerist reports a user who saw line items which looked liked charges, but were really links to advertisers. Ninety-one percent of their readers who voted in a mini poll thought it was "very uncool". The other 9% are probably Nigerian telemarketers.
Why don't Saskatchewaners like summer?
If you're looking for one place where the economy has actually been growing, try www.saskjobs.ca . The Premier of this western Canadian province is calling Canadians to come for the jobs. I checked, and lots of those jobs are in mining, agriculture, and places named "Moose Jaw". But if you can stand the cold and like living in sparsely populated places, give it some thought. Oh, and Saskatchewaners don't like summer because it's two weeks of bad snowmobiling.
Wednesday, February 4, 2009
Side 2 - From the Folks who Love Reagan
If you missed the beginning of this discussion, you may want to read the Jan 30 and Feb 2 entries first. We're talking about opposing views on how to fix the economy -- ultra hands-on vs. ultra hands-off.
There's a blog I like to read by a guy who's so libertarian, I think he has a picture of Ron Paul under his pillow. What exactly does the Libertarian Party profess? You can look it up on Wikipedia, but personally *I* get the image of Jack Palance in City Slickers: a gun, a dog, and a "no government" wanted sign.
At the risk of talking about politics, to the left is the Nolan Chart, (courtesy of www.neo-libertarian.com) which may help to explain where we are on libertarianism.
Now erase politics from your mind and get back to economics. (Which is much more relaxing, anyway.) We simply want to find how a libertarian would fix this economy.
Don, my libertarian blog guy, calls the bailout, the power given to banks, and the government takeover of banks a "crime". I'm not sure which of them bothers him more. He calls our reliance on government an addition. He is bracing for hyper inflation. Here's his recipe for relief:
Get rid of most of government, stop all subsidies, and repeal all laws that allow off shoring (notice he didn't say make new laws to stop it). Don believes if we let the financial crises burn itself out, we can start anew.
Again, I like some of the things he says, but I'm of the school that not doing enough during the 1930s was what prolonged the anguish. I also do believe in regulations. Left to their own self interest people too often screw others over. Sorry, but it's true.
There's a blog I like to read by a guy who's so libertarian, I think he has a picture of Ron Paul under his pillow. What exactly does the Libertarian Party profess? You can look it up on Wikipedia, but personally *I* get the image of Jack Palance in City Slickers: a gun, a dog, and a "no government" wanted sign.
At the risk of talking about politics, to the left is the Nolan Chart, (courtesy of www.neo-libertarian.com) which may help to explain where we are on libertarianism.
Now erase politics from your mind and get back to economics. (Which is much more relaxing, anyway.) We simply want to find how a libertarian would fix this economy.
Don, my libertarian blog guy, calls the bailout, the power given to banks, and the government takeover of banks a "crime". I'm not sure which of them bothers him more. He calls our reliance on government an addition. He is bracing for hyper inflation. Here's his recipe for relief:
Get rid of most of government, stop all subsidies, and repeal all laws that allow off shoring (notice he didn't say make new laws to stop it). Don believes if we let the financial crises burn itself out, we can start anew.
Again, I like some of the things he says, but I'm of the school that not doing enough during the 1930s was what prolonged the anguish. I also do believe in regulations. Left to their own self interest people too often screw others over. Sorry, but it's true.
Monday, February 2, 2009
Side 1 - From the folks who love Roosevelt
I promised I'd write about two opposing views of the economy.
On one side are the people who want the government to be so small, that they could hold their Christmas parties in someones mom's basement. I follow a lot of sites run by people who subscribe to this feeling. To these writers, Ron Paul is a white-hatted underdog, Reagan was a genius and Roosevelt ruined the country with his social programs. This is the maximum free-market, minimum regulation credo.
On the other side are folks like Thom Hartmann, radio host and author of Screwed: The Undeclared War Against The Middle-Class, which I am currently reading. Hartman gushes in almost every chapter how Roosevelt's amazing foresight led us to be "a Great" nation, until Reagan killed the good thing and planted the seeds to kill America as we know it. Hartman isn't anti-free market. He argues that there is no such thing as a free market, and, if government didn't intervene in the economy, there'd be no such thing as a middle class either. We'd be back in the days where there were only the very rich and the very poor. Mind you those very rich today would not be royalty or the elite, they'd be corporations.
A quick look at Hartman's blog and you'll see his cure for the "financial crisis" is to tax stock buys and sells. Let Wall Street fund their own bailout. Let speculation be dampened and investing regain it's rightful place.
He also wants America to go back to the regulations we abandoned - the Sherman Act, Glass-Stegall, and to return to the roots of trade laid down for us by the founding fathers. He would like us to quit this "service economy" we have; it doesn't produce anything -- doesn't build real wealth, and return to the industrialized nation we used to be.
I do like a lot of things he says. But maybe I'm just a Baby Boomer longing for the simpler times of the 60s and early 70s. I would always like to see corporations held to better moral standards. I can't, though, get myself to agree with imposing limits on wealth, particularly for individuals as Hartmann states in his book. If someone is a billionaire, shouldn't they be able to leave that money to their children instead of having it taxed away to keep dynasties from developing?
Otherwise, I think Hartmann has some good ideas. And, being middle class myself, I sure would like to win this war.
Next: Details on the other side -- from the folks who wish Ron Paul were president.
On one side are the people who want the government to be so small, that they could hold their Christmas parties in someones mom's basement. I follow a lot of sites run by people who subscribe to this feeling. To these writers, Ron Paul is a white-hatted underdog, Reagan was a genius and Roosevelt ruined the country with his social programs. This is the maximum free-market, minimum regulation credo.
On the other side are folks like Thom Hartmann, radio host and author of Screwed: The Undeclared War Against The Middle-Class, which I am currently reading. Hartman gushes in almost every chapter how Roosevelt's amazing foresight led us to be "a Great" nation, until Reagan killed the good thing and planted the seeds to kill America as we know it. Hartman isn't anti-free market. He argues that there is no such thing as a free market, and, if government didn't intervene in the economy, there'd be no such thing as a middle class either. We'd be back in the days where there were only the very rich and the very poor. Mind you those very rich today would not be royalty or the elite, they'd be corporations.
A quick look at Hartman's blog and you'll see his cure for the "financial crisis" is to tax stock buys and sells. Let Wall Street fund their own bailout. Let speculation be dampened and investing regain it's rightful place.
He also wants America to go back to the regulations we abandoned - the Sherman Act, Glass-Stegall, and to return to the roots of trade laid down for us by the founding fathers. He would like us to quit this "service economy" we have; it doesn't produce anything -- doesn't build real wealth, and return to the industrialized nation we used to be.
I do like a lot of things he says. But maybe I'm just a Baby Boomer longing for the simpler times of the 60s and early 70s. I would always like to see corporations held to better moral standards. I can't, though, get myself to agree with imposing limits on wealth, particularly for individuals as Hartmann states in his book. If someone is a billionaire, shouldn't they be able to leave that money to their children instead of having it taxed away to keep dynasties from developing?
Otherwise, I think Hartmann has some good ideas. And, being middle class myself, I sure would like to win this war.
Next: Details on the other side -- from the folks who wish Ron Paul were president.
Friday, January 30, 2009
Grimm's Tales of Grim Times
Wall Street bankers remind me of a particular fairy tale.
This couple live a meager existence until the husband saves the life of an elf and is granted a wish. He wishes he and his wife could be an Earl and Countess so they would have status and money. It's all good until the wife tells her husband he should have wished they would become King and Queen since he could have wished for anything.
The husband finds the elf and asks to change the wish. It's granted and they become powerful and wealthy. That is, until the wife decides that Emperors and Empresses have even more power and money and asks her husband to find the elf and change the wish again.
The husband does it and now they are rulers of the far and wide and mega-wealthy. But, the wife figures out that even the Emperor and Empress have to listen to the Pope, so she asks her husband to change the wish again.
The husband finds the elf and asks to upgrade the wish to Pope (for his wife). To his surprise, the elf complies. The wife is now Pope and has power to dictate to millions of people. Financial tributes pour into her. But it's not satisfactory when she finally realizes that even the Pope has to submit to God.
So she asks her husband to ask the elf to make her God. They argue about it until he's worn down. He finds the elf and makes the request.
When the husband returns home, he finds they are back in the meager circumstances in which they started off. All the other wishes have become null and void.
The endless quest for more money, higher successes, and faster profits finally did in the economy. Yet, fairy tales seem to mete out more justice than does real life. In real life the leaders of our world wide economic Ponzi scheme are still earning large salaries, getting bailed out of their troubles, and giving themselves bonuses. What's the answer to this?
In the next blog entry, I'll tell you about two completely opposing views on how these economic ills can be fixed.
This couple live a meager existence until the husband saves the life of an elf and is granted a wish. He wishes he and his wife could be an Earl and Countess so they would have status and money. It's all good until the wife tells her husband he should have wished they would become King and Queen since he could have wished for anything.
The husband finds the elf and asks to change the wish. It's granted and they become powerful and wealthy. That is, until the wife decides that Emperors and Empresses have even more power and money and asks her husband to find the elf and change the wish again.
The husband does it and now they are rulers of the far and wide and mega-wealthy. But, the wife figures out that even the Emperor and Empress have to listen to the Pope, so she asks her husband to change the wish again.
The husband finds the elf and asks to upgrade the wish to Pope (for his wife). To his surprise, the elf complies. The wife is now Pope and has power to dictate to millions of people. Financial tributes pour into her. But it's not satisfactory when she finally realizes that even the Pope has to submit to God.
So she asks her husband to ask the elf to make her God. They argue about it until he's worn down. He finds the elf and makes the request.
When the husband returns home, he finds they are back in the meager circumstances in which they started off. All the other wishes have become null and void.
The endless quest for more money, higher successes, and faster profits finally did in the economy. Yet, fairy tales seem to mete out more justice than does real life. In real life the leaders of our world wide economic Ponzi scheme are still earning large salaries, getting bailed out of their troubles, and giving themselves bonuses. What's the answer to this?
In the next blog entry, I'll tell you about two completely opposing views on how these economic ills can be fixed.
Thursday, January 22, 2009
When I see something like this in the Cary News, I know the recession has officially come to Western Wake County.
Look at the first image. It's not just the price that screams Discount Bin, it's the kooky lettering, the giant $2, the fact that they didn't use the more sophisticated '$1.99'.
The last time I saw Valu spelled without an 'e' I think I was in a dollar store. The graphics on the second image are deliberately unfancy, purposefully plain to convey the image of thrift.
Morrisville is in a well-yuppized area, an area able to support more than a few upscale local magazines, restaurant chains, boutiques. We were a test market for the McCafe. You can find dentists with memory foam chairs here, spas with nationally-recognized accolades and $150.00 hair colorings.
My grocery bill went up about 30% when I moved to Western Wake county from Durham county. And now, have I finally seen the first hint of recession in Cary/Morrisville/Apex/Holly Springs.
Well, maybe the second hint. The first was probably when a new, state-of-the-art Kroger cried uncle in the grocery store wars last year and closed down.
Sunday, January 18, 2009
What do you really value?
Let's look at a fun social/marketing experiment on value.
I'm playing a game on Facebook called "Hatchlings". You collect Easter eggs around the site which hatch into pets: colorful fish, cute pachyderms, googly-eyed chihuahuas. Each egg you collect makes your score go up, and you can watch how you do against the Facebook community. Some eggs are "limited editions" which, or course, are hard to find. As your egg count amasses, you earn credits to "buy" other limited edition eggs from a warehouse.
When my husband first heard of it he asked me what you got for your efforts.
"A picture of an egg." I told him. "And later a picture of what the egg hatched."
So why are more than 770,000 people are signed up to play a game that just gives you pictures? Some even paid to become premium members.
And why are so many advertisers paying to be patrons of the game? There are 26 pages of them. (When you patronize an advertiser, you get credits for warehouse purchases.)
I'm playing a game on Facebook called "Hatchlings". You collect Easter eggs around the site which hatch into pets: colorful fish, cute pachyderms, googly-eyed chihuahuas. Each egg you collect makes your score go up, and you can watch how you do against the Facebook community. Some eggs are "limited editions" which, or course, are hard to find. As your egg count amasses, you earn credits to "buy" other limited edition eggs from a warehouse.
When my husband first heard of it he asked me what you got for your efforts.
"A picture of an egg." I told him. "And later a picture of what the egg hatched."
So why are more than 770,000 people are signed up to play a game that just gives you pictures? Some even paid to become premium members.
And why are so many advertisers paying to be patrons of the game? There are 26 pages of them. (When you patronize an advertiser, you get credits for warehouse purchases.)
Surely the players are getting something beyond colorful eggs and cute hatchlings. By figuring out what they get, we can tell a lot about value, not just for games, but for any purchase.
About half my Facebook friends play the game. Some are addicted (you know who you are). I'm asking if you'll comment on what you get out of playing. Here's things I can think of:
The Treasure Hunt
I play the game just to see what comes next. When will I click on a basket and find a Limited Edition egg? What will hatch from it? Last week I wildly ran my score up to 1000 shells because the Warehouse eggs that cost 1000 shells were grayed out and I couldn't see what they were until I had earned enough to buy them. When I got there, I gifted my purchase to a player who I knew would appreciate having it more than I would. Like a gambler, I just want to see what the next card, next spin, or next click will bring.
Pride in Gamesmanship/Competitiveness
Again, the game scores one point for each egg you find. It displays how you rank against all the players and against your own Network (you join a network in Facebook, usually your city but could be something like your school). There's something compelling about having a high rank, and even more compelling is keeping the high rank once you get it.
Seeking Fame
If you make the top ten in either the general community or your network, your name will show up on the list that every user sees when they look at their Hatchlings page. There's a real high in knowing you are on that list, especially when you know your friends can see your name.
--------------------
This application is popular not because of the its technicalities, but because of the psychology behind it. The developer did a great job building into it the things that make people keep coming back every day. By the way, when I checked the developer's profile, I couldn't see the whole thing, but I did see that he just graduated from high school two years ago. I'm sure he has help with this application, it's too big for one person to handle, but still, -- nineteen years old -- dawgs!
When I say "credit", you think of . . .
Yesterday I faced the familiar question at a checkout line: credit or debit? These days I suppose you could be more proud of using a debit card than a credit card. It would be like saying: "I don't have to pay later, I have the money for this purchase right now. I'm a responsible budgeter." But it used to be the other way around.
In the 1970s, (in Canada at least, where I used to live), debit cards came out specifically for people who were either so young or such poor money managers, that they couldn't get credit. Yes, there was a time before this credit crunch when financiers were picky about who they gave credit to. You couldn't get a card if you didn't work full-time and have a good relationship with a bank. You couldn't get a card if you recently screwed up. Back then, when you told the clerk you were paying with credit, you could be proud that a bank thought you were responsible enough to be trusted with a card.
And before that, it used to be the other way around again. Credit was for losers after the Great Depression. That era ended for my parents when they bought their first home in 1952. My father told the bank proudly that he never had any credit. He always paid in full.
"If you never had any credit, how do you expect to get a mortgage?" The banker asked him. Dad was forced to get a Shell Gas charge card to be able to qualify for the home loan.
And before that . . . well, I learned on PBS the other day that lending first became a big business in Europe in the 1600s in Venice. But, lending at usury was seen as a sin, so those of Christian heritage were forbidden to do it.
In the 1970s, (in Canada at least, where I used to live), debit cards came out specifically for people who were either so young or such poor money managers, that they couldn't get credit. Yes, there was a time before this credit crunch when financiers were picky about who they gave credit to. You couldn't get a card if you didn't work full-time and have a good relationship with a bank. You couldn't get a card if you recently screwed up. Back then, when you told the clerk you were paying with credit, you could be proud that a bank thought you were responsible enough to be trusted with a card.
And before that, it used to be the other way around again. Credit was for losers after the Great Depression. That era ended for my parents when they bought their first home in 1952. My father told the bank proudly that he never had any credit. He always paid in full.
"If you never had any credit, how do you expect to get a mortgage?" The banker asked him. Dad was forced to get a Shell Gas charge card to be able to qualify for the home loan.
And before that . . . well, I learned on PBS the other day that lending first became a big business in Europe in the 1600s in Venice. But, lending at usury was seen as a sin, so those of Christian heritage were forbidden to do it.
Tuesday, January 13, 2009
Conspiracies that don't even need UFOs
I want to buy stock in some mining companies so I've been researching the market. If you're a follower of my blog you know that many analysts believe the gold futures markets are manipulated. I thought you'd enjoy some of the conspiracy theories I've read about gold and silver:
The Plunge Protection Team did it
During the 80's President Regan put together a group to monitor and protect the economy. This is a fact. They are called The President's Working Group on Financial Markets, but I think it was the Washington Post that gave them the beloved nickname in the subtitle. This conspiracy theory says the PPT has directed Wells Fargo and Goldman Sachs to buy massive gold shorts. Why? Because soaring gold prices would hurt the US dollar.
It's a plot to end communism
Back again to Regan's time, this theory says the USSR's wealth was tied up in gold and oil, so the US government worked inside to bring down the prices of those commodities. Prices went back up after communism fell. They've come back down again now, so, are we still trying to bring down Russia? Or is there some other country with vast holdings of gold and oil that we want to bankrupt?
There's no gold in Fort Knox
Let's go back to Presidents Johnston and Nixon. How did they fight in Vietnam without incurring a huge deficit? Theorists believe they spent all the gold in Fort Knox to pay for that war. This is why no-one can go inside Fort Knox anymore when there used to be tours there. It's also why Nixon ended the gold standard and let our currency float. Also, all the gold on the government's books is still priced at $42.00 an ounce -- what it was when we were on the gold monetary standard. Why hasn't it been repriced to today's value?
The Banks are doing it
This theory is a bit like the first one. Only instead of the banks shorting gold at the request of the government, they are shorting gold to protect each other's earlier short positions.
The Futures Market are naked
I hope you're not expecting an undressed trader. COMEX is the market where precious metals are traded. Say your firm buys mega ounces today for delivery in three months. When the trade comes due you either take the ingots or take the money for them. Unless you're a dealer or industry that uses metal, you would probably take the money. Conspirators believe COMEX is selling more shares of precious metal than it has. There's a movement afoot to get traders to take their earnings in metal rather than in cash to force COMEX's hand.
The Plunge Protection Team did it
During the 80's President Regan put together a group to monitor and protect the economy. This is a fact. They are called The President's Working Group on Financial Markets, but I think it was the Washington Post that gave them the beloved nickname in the subtitle. This conspiracy theory says the PPT has directed Wells Fargo and Goldman Sachs to buy massive gold shorts. Why? Because soaring gold prices would hurt the US dollar.
It's a plot to end communism
Back again to Regan's time, this theory says the USSR's wealth was tied up in gold and oil, so the US government worked inside to bring down the prices of those commodities. Prices went back up after communism fell. They've come back down again now, so, are we still trying to bring down Russia? Or is there some other country with vast holdings of gold and oil that we want to bankrupt?
There's no gold in Fort Knox
Let's go back to Presidents Johnston and Nixon. How did they fight in Vietnam without incurring a huge deficit? Theorists believe they spent all the gold in Fort Knox to pay for that war. This is why no-one can go inside Fort Knox anymore when there used to be tours there. It's also why Nixon ended the gold standard and let our currency float. Also, all the gold on the government's books is still priced at $42.00 an ounce -- what it was when we were on the gold monetary standard. Why hasn't it been repriced to today's value?
The Banks are doing it
This theory is a bit like the first one. Only instead of the banks shorting gold at the request of the government, they are shorting gold to protect each other's earlier short positions.
The Futures Market are naked
I hope you're not expecting an undressed trader. COMEX is the market where precious metals are traded. Say your firm buys mega ounces today for delivery in three months. When the trade comes due you either take the ingots or take the money for them. Unless you're a dealer or industry that uses metal, you would probably take the money. Conspirators believe COMEX is selling more shares of precious metal than it has. There's a movement afoot to get traders to take their earnings in metal rather than in cash to force COMEX's hand.
Sunday, January 11, 2009
Some new rules to keep your money safe
1. You may have read that anyone having a claim against Bernard Madoff (the broker who engineered the $50 million Ponzi scheme) had to show proof that they owned his investments. Some people had nothing to show.
We all get statements and assorted paperwork from our investments. We probably give them a quick look over then send them to the shredder. "If I need to look at my investments," we think, "I can always do it online."
But what if your bank or broker goes bye-bye, merges, or has to sell its assets to another company? You may not be able to get to your online records for awhile. You may want proof of your assets.
So, new rule: keep about a one-year's paper copy of all your financial records and statements, particularly transactions.
2. Have you ever heard of Satyam Computer Services? They're one of the largest outsourcing firms in India serving 66 countries and working for Fortune 500 Companies. Last week they admitted their books were cooked and the stock went into free fall. Some analysts thought the company would be shut down by Monday.
What if a foreign outsourcing firm has your financial or other personal information and the company goes into disarray. Think about it: disgruntled employees, massive layoffs, upheavals in supervision. And if a foreigner steals your data, you very well may not be able to sue.
3. Lastly, my favorite charity experienced a 17% increase in need this Christmas over last. You can bet their contributions dropped.
So, new rule: If you're working, please find a charity you believe in, and become it's patron. They need you.
So, new rule: If any call center needs your personal data, ask if you can still complete your business dealings without it. If you want to purchase something from a foreign firm, get a VISA gift card and use that instead of your credit card.
So, new rule: If you're working, please find a charity you believe in, and become it's patron. They need you.
Friday, January 9, 2009
It's Suze!
Download Suze Orman's new book for free until January 15.http://www.oprah.com/article/oprahshow/20081119_tows_bookdownload
Tuesday, January 6, 2009
The Underground Gold and Silver Market
The real cost of precious metals can be found on ebay.That's what some traders have admitted.Ever since the summer, the "official" price of gold and silver, on the futures market, has decreased. But demand has been high which has lead to scarcity.
Here's an example:
Using last night's closing price, had I bought an ounce of silver on the futures market I would have paid $11.05.
Had I bought a one ounce American Silver Eagle coin (ASE) to hide in my flour bin at home, I would have paid $15.54.
Plus Shipping.
And I would have had to wait for it to come in.
And I would have had to FIND one first.
Real bullion -- bars and coins -- have always had a premium of less than 10%. These prices above have a 41% premium.
The average bid for that same coin on ebay this morning runs around $17.50 with free shipping.
Now here's the deal. If I wanted 500 ASE coins, I might be able to find them for as low as $14.68 apiece.
Let's see . . . I could then sell them on ebay for a profit of $2.82 apiece, times 500, equals $1,410 profit, less my shipping costs . . . maybe I could squeeze out a $1000 profit. But to sell 500 coins in lots of singles, doubles, tens and twenties, and ship them all would be a full time job. I'd really be earning my money.
Here's something scary. It used to be that a producer that only sold in bulk (a 5000 ounce minimum) had very good prices for coins. Good enough that someone with the money to invest could actually make the scheme above work. But when I checked today while researching this blog entry, A-Mark, one of these high-end dealers, had a price for ASE higher than any other place I looked (except ebay).
So back to my day job.
Sunday, January 4, 2009
One good sign and two bad in Morrisville
The good (economic) sign is that restaurants are still busy. We waited in line at The Cheesecake Factory, and on a Monday night. For readers who live in places like New York city and Toronto, know that Raleigh/Durham eateries, at dinner, pretty much only fill up on the weekend.
Even The Cracker Barrel was busy for breakfast this morning (Sunday) BEFORE church.
Now the the bad signs. My hubby's favorite gas station hangout has decided not to open on Sundays anymore. Except for a few lottery ticket buyers and some gas sales, they just aren't getting enough business.
And here's a dew-line barometer of the economy if I ever heard one: our retired neighbor, who regularly dumpster dives around at the Morrisville big-item trash drop off said there's been nothing good coming in. Just Christmas wrapping and boxes, he said. No furniture, household goods, etc.
Even The Cracker Barrel was busy for breakfast this morning (Sunday) BEFORE church.
Now the the bad signs. My hubby's favorite gas station hangout has decided not to open on Sundays anymore. Except for a few lottery ticket buyers and some gas sales, they just aren't getting enough business.
And here's a dew-line barometer of the economy if I ever heard one: our retired neighbor, who regularly dumpster dives around at the Morrisville big-item trash drop off said there's been nothing good coming in. Just Christmas wrapping and boxes, he said. No furniture, household goods, etc.
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