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.
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