2009-11-20: Re-energize Your Job Hunt
If you?re not working, for God?s sake do something with your time ? even if it?s just part-time voluntary work. Recruiters says a gap on your CV is the biggest no-no of all. Remember, recruiters are human ? they know things are tough out there for graduates like you right now, so they?ll forgive you if you haven?t been doing a hot-shot job all this time, or earning a fabulous salary. But sitting on your bum just looks bad. In contrast, doing something constructive is always a good look ? it shows you can motivate yourself and that you haven?t just been festering on your mum and dad?s sofa since you graduated. Don?t fall into the trap of thinking it?ll take time away from your job hunt. It?ll make you far more motivated and efficient with the time you do spend job-hunting, plus you?ll be picking up skills and experience as you go ? which all sounds good in interviews.
The economy is a mess and somewhere between 10% and 25% of all workers (depending on what figures you believe) are unemployed right now. Does this mean you curl up in the fetal position on the floor until starvation takes you to a better place? NO! Head over to the linked article and get yourself going again. Remember, there may be a lot of people who don't get hired, but you don't need for all of them to be hired, just for you to get a job.
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Foreclosures rise 5 percent from summer to fall - Yahoo! News
The number of households caught up in the foreclosure crisis rose more than 5 percent from summer to fall as a federal effort to assist struggling borrowers was overwhelmed by a flood of defaults among people who lost their jobs.Unemployment is the main reason homeowners are falling into trouble. While the economy is likely out of recession, the unemployment rate ? now at a 26-year high of 9.8 percent ? isn't expected to peak until the middle of next year.
Insurers dropping Chinese drywall policies - Yahoo! News
Thousands of homeowners nationwide who bought new houses constructed from the defective building materials are finding their hopes dashed, their lives in limbo. And experts warn that cases like the Ivorys', in which insurers drop policies or send notices of non-renewal based on the presence of the Chinese drywall, will become rampant as insurance companies process the hundreds of claims currently in the pipeline.
At least three insurers have already canceled or refused to renew policies after homeowners sought their help replacing the bad wallboard. Because mortgage companies require homeowners to insure their properties, they are then at risk of foreclosure, yet no law prevents the cancellations.
Well, if you consider that around 70% of the economy is consumer spending, and consumer spending is still being crimped by existing unemployment and continuing job losses, the recession is a long way from being over. That point may come next year or the year after that. But it isn't here yet.
That is before the problems caused by substandard building materials--Chinese-made drywall--used in recent construction. Foreclosures surged, and are poised to do so again. And on top of that, insurers are about to put a number of people out of their homes.
And the government, with the help of the mainstream media, is telling us that the worst is over. It is over on Wall Street and in bank and insurance company boardrooms. For regular people, we have some more roughness ahead. Here are some clues:
- The EPA is poised to regulate carbon dioxide emissions as though this necessary trace gas was a dangerous pollutant. Over the next few years, factories will have to invest in expensive and unproven "capture" equipment, as well as paying for underground disposal. Vehicles will given CO2 quotas, raising their prices. Fuels will gain "carbon surcharges" to discourage use. Since the use of energy-consuming equipment is the primary difference between present-day society and that of the mid-1800s, you can expect some significant declines in living standards to follow. If Congress passes the climate bill, the effect will likely be even worse.
- Real estate prices are still too high in major population centers, including California and Nevada on the West coast, and New York, New Jersey, and Connecticut on the East coast. When a substantial fraction of the populace can again afford to own their own dwelling units (not necessarily single-family detached housing), and I'm talking about 40% to 60% or more, without having to depend on long-term loans to complete the purchase, then housing will be in balance. But remember that many of those will also require a loosening of restrictive zoning and CCRs in order to enable the new owners to derive maximum benefit from their properties.
- We're still supporting and subsidizing big corporations and financial institutions at the expense of individuals and families and the smaller, locally-owned businesses (SLOBs) that provide most people's jobs. These same big companies are shedding American jobs, replacing them with low-wage (and often low-skilled) foreign labor. This is going to continue to eat away the American middle class, leaving only managers and investors feeling good about their futures.
- We are still expecting our school system to be a job-training enterprise. The function of schools has always been to give a common base set of skills that would enable employers to start from a known state and train their newly-hired employees to do the job. Unfortunately, we have given away our industrial base, and with it any need for a common skillset. Each employer needs a slightly different set of skills, different in emphasis and in the overall balance, and the schools are not set up to provide anything like this. Meanwhile, each state and federal administration commits more and more resources to centralizing and "standardizing" something that needs to be as decentralized and destandardized as possible. What this means is that high school and college graduates will be worse and worse prepared for the workplace, as jobs require less and less of "the mushy middle" and more and more specialized knowledge and skills. It means that employers have to retrain their employees, attempting to wash out all the garbage they absorbed in the school system while teaching the employees the background and basics necessary to perform the job. This is in the now, but will only get worse as time goes on.
- The economic distress has motivated an unexpectedly large number of people to retire early, because they could not maintain or obtain suitable employment. This will move forward the year that Social Security starts to run a deficit and taxes must be raised to cover the difference (redeeming the bonds that Social Security's surplus has purchased over the years). Remember that the size of the population by age groups is such that we could see one retiree for every three workers. In plain terms, for every $1,000.00 in the average retiree's monthly benefit check, this would require the average employee to pay $333.33 in monthly direct and indirect taxes to support that retiree. Any other government needs will also need to be raised through taxation. It will also mean that large numbers of retirees will be drawing down their retirement funds (often heavily invested in stocks and bonds), affecting securities prices, rates of return, and even the kinds of securities that will be offered. A lot of the current twenty and thirty-somethings will see stifling taxes paired with miserable investment returns. Admittedly, this is a long, long way off, and not really germane to the near-term economic environment.
- The current medical insurance plan that Congress is debating will dramatically increase prices and waits for service, without making it substantially easier for lower-income workers to partake in the medical system's benefits. Nearly everyone in the middle and lower income brackets is already stretched to near breaking. Mandating the purchase of health insurance smacks of fascism--not socialism, Mr Glenn Beck, fascism--placing government enforcement mechanisms behind the marketing efforts of selected privately-owned enterprises. Most of us who are not currently covered cannot afford to obtain coverage without taking a major hit to our lifestyles (like say, living under a bridge instead of in a domicile), but the bill will make us lawbreakers and force government agencies to pursue financial penalties and jail time against us. The other thing this will do is suck up a huge amount of our economic resources, meaning that many businesses will suffer revenue declines as people reshuffle their spending to comply with the requirements. (Don't get me wrong. I am not defending the status quo, which is quite unacceptable. However, the only sensible way to go is to remove the private insurance companies from what I call "BasiCare", rolling that level of coverage into an agency that is owned by the several state, commonwealth, and territorial governments [in order to comply with the Constitution's restrictions on federal power] and making its premiums fully taxpayer-paid.) This vast subsidy to an industry (health insurance) that has failed to live up to its promises is going to hurt the economy, even though providing health care to all is sure to bring positive economic impacts.
I am not a financial advisor, so do not change your plans based on what I write. Instead, consider what I am saying and do your own research to decide for yourself what is your most advantageous course of action. In fact, I suggest you start doing that for everything. Don't allow supposed "experts" to do your thinking. Even if the decision later turns out to be the wrong one, you should make up your own mind and make your own decisions. Whatever it is: whom to vote for, what vehicle to buy, where to live, what color pants to buy, what time your ten year-old should go to bed, and much more should be your decision and yours alone.
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2009-06-15: Plastic Subject To Fraud Because Banks Profit
Security experts say there are several steps the payment industry could take to make sure customer information doesn't leak out of networks.
Banks could scramble the data that travels over payment networks, so it would be meaningless to anyone not authorized to see it.
For example, TJX Cos., the chain that owns T.J. Maxx and Marshalls and was victimized by a breach that exposed as many as 100 million accounts, the most on record, has tightened its security but says many banks won't accept data in encrypted form.
This highlights the problem with the current security process. If someone steals your information, you can be on the hook for a portion of the costs unless you can prove that one of the companies along the chain made an error.
The article has one glaring error: it claims that most data loss occurs during transmission. The truth is, online vandals routinely penetrate supposedly secure systems such as those used by banks and even the military. The number one way to prevent the loss of information is to not store that information in the first place. If the info is out there, it will eventually be compromised.
If we want to turn the tide of "identity theft" and other criminal misuses of another person's information, there are two simple changes in the law that would make it happen. The first is that an individual's personal information is their sole personal property and may not be stored or utilized by any company any longer than is necessary. Make that enforceable with prison time, and suddenly a lot of the information that is accumulated will be wiped clean. The second is even more important: Make the bank responsible for 100% of costs related to consumer data losses (except where it is proven that the consumer was at fault)--including the costs of re-establishing one's credit after suffering identity theft. Believe me, they would become a lot more stringent about securing individuals' data.
In other words, the present situation with data losses increasing exponentially each year (surely you don't believe that the ones we hear about are the only ones that happen), is solely caused by having the wrong incentives. Banks have an incentive to look like they are combating data losses and theft, but they choose minimal-cost, minimal-protection solutions because there is no penalty for doing less than they can do to protect consumers.
This, of course, is partly a consequence of allowing LOOACs and big financial companies to have inordinate influence in the legislative process. It can take a decade or more for a consumer to recover from the effects of a single data loss (or even a stolen wallet or purse). That pain is not borne by the banks, so of course they don't care to expend any extra energy to prevent it. If our government ever changes the incentives, it won't take six months to bring fraud down to unheard of levels.
As always, our focus is on small, locally-owned businesses (SLOBs). It goes without saying that there will be costs for SLOBs to comply with such standards. But the upside is that there will be a big reduction in charge-backs. And, once consumers know that their financial information is safe, they will be willing to use their plastic at John's Local Market just as they do at Bigg's Nationwide Supermarket.
The current system benefits only the large financial companies who take a fraction of every payment that is transferred through the system. Neither individuals nor small businesses benefit as much as they could, simply because of the risk of fraud and data loss that is built into the system. No, it is not possible to prevent all risks or to reduce them to zero. What is possible is to motivate those with the power to reduce those risks to actually do so.
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2009-06-14: Insurers Protect Themselves First
AIG Balks at Claims From Jet Ditching In Hudson
When a homeowner has a burglary or a driver has a crash, all it normally takes is a call to the insurance company and a description of the loss to activate the policy. But aviation liability insurance is different. It is activated by a finding of negligence on the part of an airline. If there is no negligence, then arguably there is no liability, and no obligation to pay claims.
That poses a problem for the passengers of US Airways Flight 1549. They suffered real losses and injuries, but they are widely perceived as having been saved from sudden, violent death by their heroic and quick-thinking flight crew, led by Capt. Chesley B. Sullenberger.
"Insurance companies try to protect their assets, obviously," said Bruce D. Chadbourne, a co-author of the book, "Introduction to Aviation Insurance and Risk Management," and a professor in the business school at Embry Riddle Aeronautical University in Daytona Beach, Fla. With the airline wearing a halo, A.I.G. "is going to play hardball."
This is not being shared to accuse AIG or other insurance companies of some nefarious agenda. There are plenty of other incidents to support that view. It is here merely to support an observation: As one should expect, insurance companies are not your "friends". Instead, they are self-focused businesses that strive to make as much money as they can.
In all your dealings with them, keep that in mind and you should be okay.
Twitter / Jarret Slater: On he said well my mom wor ...
he said well my mom works at the bank and she can look at any bank account.
The earlier part of the conversation was along the lines of "why do you buy so much stuff on iTunes?".
It was my impression that peeking into customer records like that was illegal. I'm not a lawyer, so I could be way wrong about that, but that was my belief. Certainly, coming home and discussing a bank customer's private financial affairs has got to be forbidden.
I bring this up simply because we tend to think that we only have to be concerned about someone from outside the system accessing our private and personal data for nefarious purposes. The truth is, sometimes, people inside of the system misuse their ability to access the information. They decide to satisfy their curiosity, they decide to gain advance notice of investment transactions, they may even decide to take your information and sell it to organized crime groups.
For this reason, I recommend that you limit where you allow your data to be disseminated.
My main job involves me traveling to different cities and being in town for months at a time. Rather than make bank transactions with unknown quantities, I have learned that I can get almost everything I need at a couple of national chains. I make sure that transactions with all other businesses are cash-only, at least until I have a feel for the trustworthiness of a particular vendor.
I do not have large sums of money to spend anyway, so that also helps me. Still, how many people have you met who have user accounts with every possible Web site out there? Even worse, how many will give their credit card number to people over the telephone? And how many will enter their information at some random site on the Internet, to order merchandise? Sorry, people, but I think you know better. Pick a few vendors that you trust with your payment information, such as PayPal or Google Checkout, then refuse to buy from a site that does not accept one of those chosen payment methods.
I was looking at a particular book, actually a couple of books by the same author. I've been wanting to purchase this book for a few months. But the site where the book is sold does not accept any of the payment methods I have chosen. The company may be legitimate and trustworthy (I think so, or I wouldn't have considered buying from them), but I am not going to spread my card information across too many companies. If they want me to buy the books, they are going to have to connect with one of my chosen payment systems.
Remember, the scenario mentioned above is probably more common than you think.
U.S. households, hit by declining home values and stock market losses, have cut back on their debt levels for the first time on record as loans remain scarce amid what appears to be a deepening recession.
I recently had a discussion with someone who told me that pyramiding debt was good for the economy. Well, when 70% of our economy runs on consumer spending, it definitely does have an impact. But debt brings increased susceptibility to the effects of economic distress, whether personal or regional or national. Why? Because debt means you have more bills to pay each month. And over time, debt means that you have less ability to purchase the things you want, because an increasing fraction of your "disposable" income is already taken.
Increased debt can also signal other problems:
- I want it now! Debt is frequently the result of being unwilling to wait and save up for purchases. The discipline really helps?sometimes, you realize you didn't want product X as much as you thought, and by saving up for it, you have funds to use toward something you really do want?and disciplined, controlled spending tends to lead toward a better personal economy.
- Out of sight, out of mind! Debt frequently happens when someone buys a product on a "no payments until 2010" plan and then waits until the time period ends before starting to pay for the purchased item.
- As seen on TV. Advertising-driven purchasing is good for the advertiser, but may not always be good for the consumer. (Disclaimer: we do have ads on some of our Web properties and will add more in the near future. We believe that advertising can be useful if potential purchasers use it as part of their product research. We do not encourage mindless response to any advertising anywhere.)
- My friends have this, now I want it. Peer pressure is a powerful tool for enforcing conformity. We warn our teens about it, but no high school ever had as much of it as any workplace. Because Joe bought a new vehicle, now you have to get one, and because you get one, Jane will also get one. Your mom was right: "If Joe jumped off a bridge, would you also jump?"
- I can't pay my bills, so I'll use the card. Often, debt is used to continue the lifestyle one is accustomed to living, even after the person's income is reduced below the amount that could support that lifestyle.
The other important thing about this, since these articles tend to vanish after a week or two, is that declining home values are also cutting people's net worth. It would be interesting to see whether Americans' indebtedness is dropping faster than our net worth. After over a year of economic bad news, it surprises me that people are just now starting to get serious about surviving this crisis.
We need to understand that it will be decades before we finish paying off the money the government borrowed to bail out incompetent bankers (and insurance companies, and stock brokers, and ...). Decades. Expect taxes to take a bigger share of your paycheck than they have recently taken, because the government also needs to pay off its loans and get out of debt.
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ABC News: Interest rate cuts? Not on credit cards
Despite falling interest rates, a growing number of consumers are paying the same ? or even more ? to borrow on their credit cards.
Surprise, surprise. The credit card banks are not your friends. The failure to lower rates is news, but the sneaky and abusive way that credit card companies operate is not news. Banks these days are the modern mafia, except they use lawyers instead of leg-breakers. You see commercials in which they tell you that they are your friends, that they are on your side, that they are pleased to provide you the financing to help you accomplish your goals. Those commercials do not tell the full story.
Banks really are happy to provide you some financing, provided that they can insert their feeding tube into your financial aorta. As soon as that happens, they will drain you of every vestige of financial vitality, and then discard your worthless carcass along the highway.
Say it with me: Banks are not my friends. They are vampires that seek to drain my financial lifeblood.
Get the picture?
2007-10-18: Change Of Venue
Have you ever seen in the paper where a defense attorney who expects to have a hard time if the case is tried where the crime occurred will ask for a change of venue? Sometimes, this can help the client's chances by removing him/her from a place where there has been a lot of publicity about the case to an area where the case is not as well-known.
Sometimes, a change of venue is the best thing for your financial health also. This is another article about freedom from financial bondage.
There are certain areas in most cities where housing costs are higher than in otherwise similar parts of the same city. Similarly, there are areas of most states, and areas of the country where housing and other costs are higher than in otherwise similar areas.
There is a practical limit to most people's income. This is dependent on several factors, such as what kind of work you do and your level of skill and even where you live and practice your trade. However we look at it, most people have a ceiling on how much they can expect to earn. Many people try to tell you how to raise that ceiling. This is not about which techniques do or do not work at raising that ceiling. This is about reducing your expenses enough to make it possible to be free from bondage even if you cannot raise your income limit.
I recently spent four months working in the state of New Jersey. New Jersey, according to what I read, has the second-highest median income, the highest automobile insurance rates, and some of the very highest costs of living in the country.
Now, I am not saying that if you live in New Jersey you should move. I am saying that you should consider the cost of living wherever you decide to live.
You may find that you can have a better life experience with a lower income just by relocating to another state where living costs are lower. Not everyone can or should move to the lowest-cost area, or they'll just wind up causing costs to go up there also. But you owe it to yourself to look at that as one of the factors that you use to determine where to live.
In some areas, $1,000 per month rent is exceedingly low for a 4 bedroom house. In some other areas, it is exceedingly high. In some areas, the housing cost is offset by the comparative ease of getting to and from work. These are all factors to consider, and if you feel that it is right for you, go ahead and move away from the highest cost areas to somewhere that is somewhat less expensive to live in.
