Archive for March, 2010

I got a letter today that my annually adjusting ARM would be adjusting in June from 4% to 3.125%!   Yeah baby!   This is why it’s so hard to pay off this mortgage, the rate keeps vacillating between 3% to 4.5% over the past few years.    Even if this ARM ballooned to 6% or 7% the mortgage payment would still be very manageable so why pay it off?

Unfortunately, while I would normally take the extra cash and invest it in the market, I can’t do that because this market is way overheated and long overdue for a big dip down.    So I can’t pay off my mortgage and I can’t invest in the market so the cash mounts and earns a paltry rate.   What a world!

So I’m having lunch with a co-worker and we start talking about this Obama health care deal.    The one thing I can’t wrap my head around is why the thing doesn’t start until 2014.   Seriously, why wait nearly 4 years to get started but then my co-worker mentions that the taxation goes into effect immediately in order to “pre-pay” for the coverage in the future.

I’m not sure if that’s true or not but it did bring up a couple of interesting scenarios.   According to this Asia Times article, by 2014 all of the G7 countries will have a debt to gross domestic product of 100% of above.

By 2014, International Monetary Fund official John Lipsky remarked March 21, the debt-to-gross domestic product (GDP) ratio of the Group of Seven countries will reach 100%, and the governments of the industrial world will carry the highest debt burden since shortly after the end of World War II.

So while perhaps many people are cheering that only rich “evil” people are being taxed because the large tax bite comes from people earning 200k to 250k or more then it may be that a large portion of the population will be earning above the 200k mark in 4 years.   Does that sound implausible?   If the median salary today is around 53k then it would only take four consecutive raises of 30% to get that up to 150k by 2014.   I know everyone’s thinking that a 30% raise for the next four years is pretty silly but don’t forget that the Federal Reserve has pumped trillions of dollars into the economy and they’re floating out there.  I’ve written about spotting 20% energy inflation priced into markets a few times already just into 2012 and energy inflation always seems to grow exponentially too!

In another scenario and discussion, we discussed that perhaps the delay till 2014 is to make sure a few thousand sick boomers die off before this thing goes into effect to save money.   It seems that insurance companies are perfectly within their rights to deny or limit coverage now till 2014 so that will definitely kill some people that have serious medical problems.

Speaking of boomers, it seems that every day 10,000 new boomers hit the retirement dole so since there are 1,380 days till January 1, 2014 then I guess 13.8 million boomers won’t pull the trigger early and retire early knowing that they won’t have health care until 2014 now.

No matter which way you look at it, there is huge critical mass building toward the 2012-2015 years and something is going to make a huge “crunch” sound when it happens and it’s beginning to sound a lot like hyperinflation

It’s amazing what the web has done to retail sales but more amazing is how my buying decisions are impacted by reviews I read on Amazon.   I’ve been in the market for so many new gadgets and gizmos that I’ve often gone online to read reviews and do some research.   Often, after reading a few reviews I usually make the decision not to buy something because of users opinions.

For example, I wanted to purchase a Kindle at one point but after reading this negative review I opted not to buy it.  “Gadget Queen” makes some serious and valid points that would have really irritated me if I had encountered those same problems.

Next up is a storage solution that I’ve been looking for and this is just one review of a product that convinced me to keep looking.   I am close to finally buying either a Synology or Thecus box and loading it up with 5 to 10 TB worth of drives to store my video, photos and music.

There are plenty of other items which I won’t cover but you get the idea.   It is no longer good enough to read reviews of products as I’ve come to expect actual user feedback on a product.   It’s great to review a product in a laboratory but real world use gives you the real picture.

Ironically, this level of thorough online review is needed because otherwise I wouldn’t be shelling out thousands of dollars for products that I would prefer to buy at a local store in the event that I needed to return it.  Clearly, if the vast majority of users/reviewers have little or no problems with the product then it’s a good indication that it’s a solid product.    I just don’t get why more online retailers don’t get the power of these reviews!

I’m halfway through my second semester at MBA school and one thing is becoming fairly apparent.   MBA programs seem to be entirely geared to creating worker drones than independent thinkers.   The course work I’ve had so far has not been challenging but rather tedious.   From calculating statistical ratios to creating common size statements and analyzing balance sheet statements to writing management reports on mundane topics with narrow scopes have all proven to be fairly useless in my line of work.

I honestly feel sorry for the young kids in there thinking that they are learning valuable skills for their future roles as executives because they’re not teaching much beyond how to be a worker drone accountant or worker drone low level manager or worker drone analyst.   My conundrum is that I’m addicted to low cost nearly interest free student loans otherwise I’d bail out.    My other conundrum is that employers want to see this degree on resumes which is the biggest farce ever!

I’ve decided that I will definitely not take any summer classes since I plan on taking a long vacation to Europe or elsewhere this summer.   I need a break from all the tedious and pointless busy work.

So while I read many reports on a variety of items from currency, economic activity, energy analysis, and so on, perhaps the most informative economic indicator for me is simple observation.    For the past few months, whenever I went to the mall the parking lot was nearly full and restaurants have been full but after returning from my spring break week, the mall was half empty!    Granted, I think the kids, teenagers and others may be out on spring break week hence the empty mall but something doesn’t feel right.

When we were up skiing, the ski resort did have brisk business but the area mostly catered to wealthier clientele.   Truth be told, there were plenty of cars available at the rental area as were there plenty of rooms in hotels so I don’t quite buy the “everyone’s on spring break” argument when it comes to the mall and other places.

I’m not sure what is happening but I get the feeling something more ominous is about to happen.    Consider this a heads up!

We just got back from a spring break skiing trip and I had the unfortunate circumstance of having to fly Delta on the trip.   On the way up there, Delta’s flight was overbooked and nearly half my party got bumped off the flight.   What really sucked though is getting hit for $25 “baggage” fee at the airport that I had to pay separately.    Imagine going to the grocery store, getting a gallon of milk priced at $3.99 and then having the grocery store tack on a $0.75 “bagging” fee at the checkout.  You’d think that was ridiculous right but few people seem to complain about airlines.

Worse yet, on the way back the flight was overbooked again and some people got bumped off the flight and you guessed it, we had to pay another $25 fee per bag.   We won’t be flying Delta anytime soon again until they change this stupid policy.   Ironically, Southwest Airlines is becoming my airline of choice because of their “bags fly free policy” but they do have a major drawback.  For some reason, Southwest airlines almost always has a stop somewhere and don’t seem to offer any direct flights.  Worse yet, Southwest doesn’t fly internationally so that limits us to domestic locations but they still have better pricing and service than most airlines.

So during my lunch break I head over to Lowe’s to buy some gardening tools and I’m now wondering if Lowe’s is hiring people for the Post Office because of the horrible service.  I have about $60 worth of tools and am at the quick self check out nearly completing my transaction when the attendant comes up to me and says she needs to see my ID.  I say, “sure” and reach into my wallet, open it up and my drivers license is gone.   At this point I’m not sure where it is but I’m guessing my wife or kids “borrowed” it for some reason so I tell the Lowe’s employee that I don’t seem to have it.    She gets into a panic and doesn’t know what to do, “I’ll have to check with my supervisor.”  So she leaves for a few minutes and comes back with someone (guessing it’s the supervisor).   “Sorry sir, it’s policy that we need to see id.”

I tell the lady that I don’t have my ID but my Corporate Badge is hanging from my belt (with my name AND picture on it) but says the store policy is to see drivers license.   I say, “Oh well, it’s not my loss it’s yours” and I walk out.

Frustrated, I head over to Costco to buy a compact flash card for my digital camera for my upcoming vacation trip.  I pickup the placard for the item I want and head over the checkout.  It dawns on me that I still don’t have my drivers license but I can’t remember if Costco checks or not so I proceed.   She scans my credit card, charges the items then asks for my ID!   I tell her that I don’t have it with me and she says, “do you have anything with your picture on it?”

I show her my corporate badge with my name, employer, and picture on it and she says, “that’s good enough.”

Now I understand fraud at retail outlets is pretty bad but to apply blanket policies without thinking the process through is pretty stupid.   I guess it is possible that a ring of fraudsters are dressing up like executives and heading over to retail outlets like Lowes and loading up on $60 in garden tools with stolen credit cards to make out like bandits but the premise of the story is fairly implausible.    The difference between the brain dead Lowe’s employees with poor training and the Genius Costco employees is fairly obvious in this example.   Perhaps the Costco employee violated a policy but I am more inclined to believe that she is allowed to make a judgment call and made the determination that someone dressing up in a business attire, heading to the shop during lunch hours for a single item wasn’t out to rip the company off.

I also know how these policies get implemented because I’ve sat in board rooms with idiot Vice Presidents of Risk Management and their like where they come up with these inane blanket policies that irritate and drive customers away.    This is how it goes:

CEO: “We’re losing revenue to fraud, we need to do something about it!”

VP Risk: “I got a brilliant idea, we’ll make mandatory ID checks on all credit card purchases, that should do the trick!”

CEO: “Ok, it’s your call if you think that will help!”

And here’s the reality:

CEO: “We’re losing revenue to upset customers walking away from our stupid and inane policies!”

VP Risk: “Yeah but fraud is down….”

The absolute biggest irony here is that the Lowe’s clerk asked if I had a DEBIT card to pay for the purchases!   I can only surmise that if I were a thief and using a stolen debit card (along with the pin) that the loss would be on the customer not on Lowe’s because that’s the only way I can imagine this policy allows for presumably stolen debit card customers walk away with merchandise while the opposite is true for credit cards.

So the moral of the story is Lowe’s is now on my shitlist/blacklist of company’s I won’t do business with for a while and I only went there because it was nearby the office.   I’ll stop at Home Depot this evening and pick up the items there.    By the way, Home Depot always asks for ID too but I’ve been there so often the workers actually recognize me when I walk in and they don’t ask anymore.    The Home Depot I visit clearly doesn’t have brain dead employees either.

In my last couple of jobs I’ve had the corner office in the high rise and this time is no different and I usually get to oversee the traffic on a major freeway or interstate and as I’ve sat on my desk the last six months and checked the traffic I’ve seen a considerable uptick in the number of large rigs coming and leaving the city.    There is currently significantly more traffic on the freeway, although still small, than I’ve seen in the past few months.

This past weekend, I started a project to implement a 56 square foot garden box to grow veggies this season, I purchased some items at Home Depot and overheard the manager tell an associate that they were beating all of their sales targets.   I have to give it to Home Depot, the service there has DRAMATICALLY improved and I’ve been going back more often since the people are so helpful.  Almost all the items I purchased this past visit were loaded onto a trolley by helpful sales associates and they even loaded the heavy cinder blocks, soil and other items into my truck for me.

I’ve been heading out to lunch with co-workers a few days out of the week and I’ve been shocked at how packed some of the restaurants are during lunch.  It would seem that the “fear factor” is diminishing a bit and while there are still plenty of problems and potential pitfalls with the economy, there is anecdotal evidence that things are getting a wee bit better.   Where we go from here is anyone’s guess….

So my wife and I are watching the Oscars and we couldn’t help but make three key observations:

1. We have seen maybe 10% of the movies that are up for Oscars and there was a time when I watched almost every movie that came out of Hollywood.   Of course, we were much younger back then with little or no time commitments or obligations so watching a movie was fairly easy to do.   Unfortunately between work and kid demands we simply can’t make it to the movie theater too often and the experience pretty much sucks now anyway.

2. The movie stars all seem to be getting older and uglier or perhaps the fact that I’m watching in HDTV and the stars aren’t as heavily makeup’d with the perfect lighting that’s making me wonder.  Oh yeah and there were so many bad make up jobs too!

3. While we were watching the Oscars we really weren’t watching it.   We were all on our laptops doing different things while watching the Oscars as a “secondary” venue.   I was blogging, wife on Facebook, son watching movie trailes on iTunes…..we watch a clip of the Oscars and tune out for the commercials, TV advertising is so dead.

I grew  up with one television in the house that got three channels: ABC, NBC, CBS and on occasion PBS.   I say on occasion because we were too far from the station to get clear signal.   At one point, we bought an outdoor antenna and picked up PBS in full clarity but that took a few years.    Most of my entertainment as a kid were 40 year old encyclopedias that my grandfather gave to my mother and hanging out with some neighborhood kids.

Today my kids have 500+ channels of TV, video on demand, music on demand on streaming on high speed network connection displayed on HDTV.   My kids have iPods that house movies, music, and a variety of games.     My kids have high speed internet and access to multiple computers in the house which include 5 laptops and two desktops. My kids have portable Nintendo DS as well as a Nintendo Wii.   My kids have a half dozen board games including at least four variations of Monopoly, Operation, various card games, and a garage full of gear: bikes, razors, basketball, soccer ball, badminton, swimming gear and camping gear.   Where I went on two vacations in 18 years, my kids have visited at least 40 locations worldwide and they’re still not teenagers yet.

My kids generally receive between $200 to $400 cash on birthdays and other holidays not to mention a ton of toys and other goods and gift cards.  I often compare and contrast the life I had and the life they have and stand in sheer amusement that no matter how much or how little you have, sometimes life can seem boring.

Whenever the kids ask for something I tell them the same thing, “You’ll play with it for a few days then it’ll sit on a shelf until we give it away to some charity.”  My son recently asked for an ipod touch and asked him why he didn’t buy one with his own money.  He really didn’t have an answer other than he wanted me to spend the money instead of him.  I asked him if he knew what would happen if I bought the thing for him and he said, “I’ll play with it for 5 minutes then get bored with it.”   I smiled at him and nodded.

We’ll be headed off on a skiing vacation trip soon and I know the kids won’t be bored.  At the end of the day, all that really matters is that they get to spend time with mom and dad.   All the toys and other garbage really don’t mean much to them and they are finally learning that lesson on their own.    The consumer economy and demographic is quickly changing and I hope it is for the better.