Why does the bailout penalize financially responsble people?

Ok, another post about how pissed I am.

First I hear about a great thing. "They" have a plan to lower mortgage rates. A plan that allows for a 4.5% or even a potential 2.5% interest rate. Finally something in this mess that helps me out directly and sounds like it will end up helping everyone in a bad mortgage as well.

This is sweet!

Then I read that "They" are talking about limiting the plan to new purchases, not refinances.

This is not sweet. It actually sucks.

It means that everyone who did their part in destroying the economy and purchased a home that was too expensive, which they could not afford *and* lost it through a short sale in the financial turmoil has a better chance than me of getting a great rate on a new mortgage. It's possible that even people who were foreclosed on might have a better chance.

So I'm pissed.

Because I did everything "right", because I paid my bills and only purchased what I could afford, I have no chance at all of getting that rate.

Since I am all paid up and fiscally responsible, I won't have the same chances for mortgage rates that someone else has. Because I can pay my bills, I'm screwed. I'll continue to pay higher rates and be treated like a second class citizen. And you know what else? With rates that cheap on new homes, people will realize the best deals are on the empty McMansions that are suddenly affordable. As a result the property value on my "vintage" small home will likely drop.

Ughhh...

Seriously, this is a really stupid plan. It creates more incentive than anything else for people to "trade up" and put their house on the market so they can buy a new house. Isn't "flipping" what got us into this mess?

Hell, if this plan goes into effect as the rumors describe it, I might try and trade up.

Sarcasm on:

Hey... Hold on a minute. Maybe I could "sell" my house to my girlfriend. I could even set the price higher in the sale and pull out some "equity" so that I can join the party (I'm always late to parties) An extra hundred grand for the market where it's at right now might allow me to pay for the house outright in a year or two. What a great speculative opportunity.

Who knows... At that rate, I could buy another house or two for "investment" purposes.

As John Lovitz once said, "Yeah, that's the ticket!"

Sarcasm off

Debtors suck

And I may be pissed at you.

I mentioned in a previous post that I was pissed because of the current economic situation. I'm now pissed just a bit more. Banks, in all their wisdom are trying to "forgive" credit card debt.

On one hand, I get why this is important - it will open up those full lines of credit and spur our economy, relieve the millions of debtors that are at the end of their ropes and cause far fewer debtors to default on the debt they have accumulated and thus save the banks money in the end.

On the other hand, I think this is just another bad idea in a string of bad ideas. It won't repossess the big screen TV or the multitude of other unnecessary things that built up that credit card debt in the first place.

The worst part of this plan is that it won't teach anyone a lesson. Nobody will learn that you can't "charge it" forever. Nobody will learn that you can't lend to people who can't afford to pay the bill.

Lets talk about the reason I'm pissed.

It's simple. I'm pissed because I didn't "charge" a new TV, so I'm still watching a 12 year old 32 inch "tube" TV that takes up half the room. While I've been able to "afford" a new TV for a long time, I have been waiting to purchase one until the prices came down and it made more economic sense or until the current TV broke. "Charging" a new 1500.00 flat screen on a credit card seemed foolish. Now I feel like such a fool for being so fiscally responsible.

Had I known that I'd be able to charge that TV and not have to actually pay it off, that it would ultimately be as much as 40% off, I would have charged up every card that I had.

Of course, I feel like double the fool because all the money that I was not spending on TVs and home appliances went towards investments that are now down.

So, I'm just a little more pissed.

But this time, I think I have a solution:

I should go run up my stack of unused credit cards, take out a home equity line and buy a lot of things that I can't afford. It's the new American way, and I can't believe that I've been blind to it for so long.

Meh.

p.s. Still have a credit card? Are you one of the few, the proud, the over chargers that will get "relief" from the "unjust" credit crunch where people "tricked" you into borrowing more money than you could afford to pay back?

Paypal me $1500.00 so that I can buy a new TV.

A thought about the "bailout"

Ok, I hear that there are a lot of people that are against the bailout. They think that somehow, 700 Billion dollars will have to be taken directly out of their pockets. I'll admit, on the surface I have these same feelings. I have a lot of anger about having to go through this at all.

But let's face it. If this fails to go through, you, I and every other American will be much worse off than if it passes. This deal has to pass. A solution has to be implemented.

1. Do you want to buy a new or different house? You won't get it unless this passes. I don't care what you think you can afford.

2. Do you want a new car? no luck with a balance sheet like yours, you'll need a credit score in the 700's to afford that.

3. Have credit cards? Get ready for the big recall and cancel because you are not a good enough risk unless you can prove that you don't need the money and won't ever use it.

4. Like your job? Companies won't get credit easily either and unless your boss is sitting on a huge pile of cash, you may not have that job much longer.

5. Cash is king. If you have it, you can spend it. If you don't, you'll have to learn to do without. This won't be too hard for you if you fondly remember college life and Ramen noodles.

In other words, unless wall street gets some "charity" main street will likely get a first hand lesson in exactly how tightly integrated wall street and main street really are.

Welcome to 1973

Last weekend, we wandered around looking for gas. Almost all stations were sold out. The one station that had gas had a line, which we waited in before filling up. We will have to do the same thing this weekend. The lines will be there, they get longer every day.

Gas stations in Georgia are surrounded by cars that devour every bit of what they have in minutes. Gas trucks are like pied pipers leading a line of cars to some station awaiting a fill up.

It's amazing.

The stock market is in shambles, the economy sucks and hopes are grim. (Sharp contrast to just a few months ago when everything was rosy)

Things are so bad that Warren buffet is buying. Inflation is as high as it was then (even though they are better at hiding it now) and will get even worse going forward. Our president is a republican ass capable of mass destruction on a scale that will be regarded as historic. We have hope and idiocy in the upcoming presidential race and Iran and Russia are really pissed at us.

Hair styles are shaggy, shirts are patterned, plaids and funk are in. (I've seen some really big "afros" out there) BIG round sunglasses are on all the cool faces.

All the import car manufacturers have tiny, fuel efficient cars and all the American car manufacturers have gigantic musclecars. Chevy is just now releasing a new big-block Camaro with promises of small efficient cars "in a couple of years", almost every car on the road today weighs more than two cars from 1979 and takes twice as much gas to run. In terms of autos, we are on par with the early 70's in every way.

Walt Disney could not make a better "re-live the 70's" alternate reality ride than the one we are in now. The similarities are eerie.

Personally, I loved the seventies. I wore cowboy boots with spurs, strapped my guns on my belt and wore my ten gallon hat everywhere I went. I got to play with toys all day and never had to work.

And while, to a certain degree I'm loving the nostalgia of this time warp, I hope that the acid wears off soon. I'd really like this "trip" to be over.

I just hope that it doesn't take me back through the 80's on the way home.

Too late...

I just realized I'm pissed off

And it's probably at you or someone that you know.

I have spent my whole life working to make sure that I pay my bills. If I get myself in debt, I PAY IT OFF.

I do not:

1. Buy a house that I cannot afford
2. Buy a second house that I really can't afford
3. Buy a big screen TV, vacations, new clothes or any other daily needs on credit
4. Buy a car that costs as much as some people's homes
5. Spend more than I make

There is a lot more that I don't do, but you get the idea. I've lived pretty much like a monk for the last few years, building for the future:

1. Spending far less than what I make
2. Driving a cheap used car that is completely paid off
3. Living in a house that I CAN AFFORD
4. Paying off any debt that I incur immediately after I incur it
5. Paying more into my mortgage than I owe every month

And of course, there is more there as well. But again, you get the idea.

So I decided that I should be pretty pissed. Because you, or someone you know decided that it was ok to party, take risks and not have to pay the bill.

Guess what. I'm going to have to pay that bill. In higher taxes. In lower value of my stocks. In lower value of my saved dollars. In lower value of my paid down house.

I'm going to have to subsidize the existence of some very lazy americans with some exceptionally messed up values.

Thanks.

Thanks a lot.

But, I have to tell you. I'll get the last laugh eventually.

I'm one of a very few people left that can get a loan for almost any house I want. I can go buy Big screen TV's, vacations and really nice cars for cash. I will survive in a world where most cannot and I'll thrive in a world without free flowing credit.

Will you?

Enron part two

I made a little money on Enron a few years back... a very little. But it was better than losing money.

This time around, I'm really perplexed as to how we are finding ourselves in the same bucket and everyone is surprised. Everyone is amazed by the price of crude oil, but what few understand is that the reason oil is priced that high has less to do with a lack of oil and more to do with an unregulated market.

Keith Olberman has an entertaining view of the situation, and Obama is planning on doing something. But I'm watching my stocks go down in value and the general economy collapse and I wonder how close we'll get to a replay of Enron.

I was in oil a few weeks back before it rocketed to 138+ and I got out because I believed it was (and still is) an unsustainable bubble and that I had made the easy money and that the most likely direction for Oil stocks at that time was down. I was wrong, I've missed a good 20% in the stocks that I sold.

Knowing now that this is caused by an unregulated market left open by Enron leads me to believe that I might have to get back in and ride this up to it's inevitable pop. Since the speculation others are still doing is causing me to lose money, I may have to adjust my approach to take advantage of the speculators.

Of course, I actually think that what I should do is to get out of the market entirely for a while. This economy is effed and apparently there are people in power (like John McCain) who want it that way.

On a long shot, there are those who are speculating in the other direction. Since Obama is working to close the loophole, we may have a collapse of the price of oil back down to 50% of it's current price. Time to buy puts on Exxon and Conoco perhaps??

Go Obama!

What Quest?

I've not written a lick about cleaning up any aspect of my life in a while.

My taxes this year sit undone after filing an extension. My house is filled with packed boxes from a move. My list of things I "need to do" is larger than the list of things I've done by so much I can't even fathom the tasks at hand. People have shot horses that are in the kind of shape that I'm in.

To wrap is all up, I work more now than I ever have - Somewhere near 16 hours a day every single day of the work week and a good 6 hours a day on the weekends.

While on the first real day off I've taken in months, this weekend I read a blurb about quests:

"It is not a quest if it does not take your life to accomplish."

It was then that I realized that my quest to simplify my life is over and a new one had taken it's place.

Work is taking my life.

Work must apparently be my quest.

This is pretty effed up.

...

..

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The Zune Flopped?

A few weeks ago, I wrote a post on the Zune. Mentioning that I thought it has "flopped" My post was picked up by a couple Zune forums and web sites that seem to think that I was calling the race a bit too early. After careful consideration, I don't think I was. I still believe that my statement that the Zune "flopped" is accurate.

I didn't write that post to dog Microsoft or to blast the Zune. I wrote it because I believe that the Zune launch should have been much more powerful a force to deal with than it was. Think about it - there was massive groundswell and hype that surrounded the launch, it felt like you were waiting for an Apple product when you read about it. There was so much publicity that the Zune should have skyrocketed out of the gate.

Instead, Microsoft blew almost every chance they had. Too bad, because from all I've seen and heard, the Zune is not a bad machine - It's just not a machine that will unseat the iPod in terms of marketshare dominance anytime soon.

Of course, I could be wrong. Microsoft could react with a great "round 2" and fix some problems and introduce killer features - I just don't think they will.

But what if they do?

To be fair to the guys in the Zune Forums, I'll spend some effort in making a list of things that in my opinion might allow to Zune to take some market share:

1. Make it smaller than the iPod... and "simpler" looking - Ditch any extra buttons and lose the metal-looking frame on the screen and "control circle" area. They make the machine look a bit more complex than it should. Simple is better. Simpls is less threatening.

2. Sell it in colors that appeal to teenage girls. Pinks, greens, blues... lose the brown.

3. Let me buy songs via wi-fi.

4. All music should behave in the same way. What is this that I hear about only being able to "squirt" some of your music, and is it true that you don't know which music is "Squirtable" until you try to "Squirt" it?. (And why is it called "Squirting" again?)

5. All music should be sold the same way. Trust me... .99 cents is way easier than .79 "points." Drop the multiple forms of payment - leave the Zune Pass for the "Plays for sure" devices and only sell by song. It works for Apple and it can work for you.

6. Tell the record labels that they will have to play ball... Not the other way around. Every time you bend to them, you make my life harder. One song price, one album price - more than that and I start to lose interest. You can always negotiate by asking them what it feels like to be Steve's bitch.

7. Build in the FM transmitter, don't worry about the receiver... We buy these devices to replace the radio, not to play it. I don't think you can use the "iPod" plugs that are available from the dealer in almost all new cars. (Yes - I know that Ford offers this, but the cars that matter are high end European luxury cars or Japanese econocars.)

8. Give away free noise-canceling in-ear headphones to all iPod owners you can find. Make sure the headphone cables are black. (think about it)

9. Build "Zune-pod" kiosks at every Starbucks. These will be wireless devices that offer to "squirt" music to any Zunes present. This will ease the feelings of lonely Zune-aholics and give them a place to congregate. To get to the new social, you have to go through the old social first.

10. Make the Zune work on a Mac. I don't think that you would have many sales here, but you need to take the war to the enemy.

The last time I wrote about the Zune, I got a few choice words thrown at me. I can't wait to hear what comes back this time ;-)

-Don

Official: Microsoft marketers on acid.

This site is apparently used to promote Vista.

When watching, I have flashbacks to college days and talking with people who really don't have a life plan and might pass out from too much drug use while they are in the middle of a sentence.

Not exactly what I needed to hear to convince me to buy Vista.

Just my two cents, but I think this was the conversation that went on at Microsoft that produced this:

Bill: Hey, can we get the "I'm a Mac guy" to promote Vista?

Marketer: I don't think so Bill.

Bill: Ok, how about we draw him and make him sound all stoned so that we look cool. It will really help us capture that "I have no money to buy Vista" market segment.

Marketer: Gosh, that's a really stupid idea Bill. But we can do it for you.

Bill: Thanks.

Marketer: I love getting paid money for this kind of stuff.

.....

5 Simple reasons why the Zune flopped.

I know that this blog has taken a turn into the off topic for the last 8 months or so, something that I'll be rectifying soon. That being said... one more off topic post before I find a place to put these more work-like ramblings.


Why did the Zune fail? There was so much hype and buildup. Almost as much as Apple gets when the media pushes their products for free.

I find it difficult to believe that, with all this free publicity, a product could flop so miserably. Even in the face of the almighty iPod. Especially towards the end of a very long iPod product cycle. There have been numerous pundits that have given their opinions, some of which I agree with, some of which I don't. However, there are a couple of items that I don't think people have picked up on yet that I think are key issues that may have significantly helped the product to fail.

1. The biggest reason? - Microsoft hired the wrong agency!

Suggestion: hire someone that knows advertising. "Welcome to the social? What happened to "Share the music" or "Set your music free?" Both are obviously better alternatives. Surely their agency must have come up with something better than welcome to the social and decided not to use it.

Worse than that, somebody apparently forgot that advertising is often about more than just one message, take a look at these banner ads for the Zune:
These images and the Bugs and skulls on the device screens pictured within them make me wonder whether my Zune going to be "buggy" or if I'll die when I use it. These ads say that both are a really good possibility.



I learned about subliminal advertising many years ago from John Lovitz Kevin Nealon on Saturday Night live when he played "Subliminal man", but apparently the agency wasn't listening. I'm sure that this has played against the Zune quite a bit without anyone really understanding why.

Subliminal messaging takes a large roll in what message an ad sends out. Think about it, would you rather be the cool and slick "Mac" or the frumpy "PC" You know which you prefer, but it was never a part of the spoken words in those commercials that you should prefer one computer over the other based on human perceptions of who is "cooler"

Product releases are more about telling the story of the product than it is about the product itself. Generating massive lust for products is something that Apple understands very well and Microsoft never will. Even the very successful X-box is, in my opinion not a product of Microsoft, but rather a side effect of the popularity and "lustability" of Bungie's Halo game. (a company that was really Mac only before Microsoft acquired them - Hmm...)

2. The Zune has bad in-store product displays

I've played with a Zune at Target and felt like a criminal when doing so, the unit was "strapped down" as if it were Frankenstein on the table. I was poking my fingers through small openings and really felt sorry for the device. It wanted to be played with, to tell me the story of why I should buy it. But Target and other stores that I've since seen it in all treated it like a caged and dangerous animal, tied down and bolted to a table. Actually, they treated me like a caged and dangerous animal, not trusting me to hold the scratch free "brown" thing.

Compare this to the Apple store iPod experience: I feel I can play in almost any way with an iPod at the Apple store, even though it is also locked down – The difference being that Apple tethers with a string and lets the iPod sit directly in the consumers hands.

3. Microsoft focused on telling consumers about features that nobody will be able to use out of the box.

Microsoft focused a lot of their messaging on the social aspect of their player. I'm not saying that the ability to "squirt" isn't pretty cool. I've thought that idea would be great for a while (though not that word). But nobody else has a Zune, so who can you share with? And that sharing is not really very good, it's only three plays or three days, and they encrypt my unencrypted MP3 files as well as files that have DRM. I can’t even truly share my own music files or MP3s even if I’m the author of those files.

It's like some M$ engineer came up with a great idea and they let Universal tell them how it should work. What a stupid idea that was. In my opinion, Microsoft should have put their focus on things they could deliver now, not things that require massive Zune adoption in order to work well.

I don’t want to sound like I think the idea of social music sharing won't work. Quite the contrary, I love the idea of social sharing of music. When on MySpace, I click "+add" on any music player and presto, that track is on my profile. I think this is a great feature. I really love the fact that I can use Apple's iTunes to listen to friend's music in the office. But all of these things work because of the huge network in place.

4. Somebody in charge implemented a very confusing payment model.

So, I have to pay 99 cents to get 79 "points" which I use to buy songs? And I have to buy a certain number of points to play but I can't spend all that I buy unless I buy more than I need.

Now come on... I don't do this anywhere else, and I think that most people will fid this to be a dumb idea.

5. Did somebody forget that size matters.

Well, it matters in electronics anyway. You can't be bigger than the iPod and win. Even by a little bit... Period. They should have shot for the Nano as the target, or at least gone with the idea of bigger and *better*.

Despite all this, can the Zune succeed?

I doubt it, but anything can happen. To really win me over, Zune has to offer something that I cannot get anywhere else. Maybe streaming television over wifi, maybe music purchases over Wifi. I don't know. But *something* has to be better. And it has to be Better for me, not for Universal, not for Microsoft, but for me.

Apple knows that and that is why I'll be buying the next iPod sight unseen.

-Don