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Today is Easter Vigil; for Christians of all stripes it has meaning in the theological calendar as the day between Christ's death on the cross and his resurrection.  For everyone else it's just a normal Saturday.

Usually what you see from me are missives related to economics or the political landscape around the world.  This is a bit different -- it's about commodities, one in particular.

That commodity is time.

Time is the one commodity you cannot buy more of, no matter how hard you work or how much money you have.  It is a commodity that you begin life with an unknown amount in your possession, and like the sand in an hourglass it slowly slips away.  Unfortunately the top of your hourglass is covered in black paint; only the last small bit of the glass before the pinch-point is transparent.  You must therefore divine exactly how much sand you began with and your alleged knowledge is usually predicated on nothing more than personal hubris.

Most people will believe they have a great deal of sand remaining in their teens, twenties, thirties and beyond.  Many of them will be right.  But with each passing decade a larger percentage of the population discovers that their optimism was misplaced as they see the top of their personal pile descend into the clear area of the hourglass, realizing that their time is about to run out.

When I was a young man, like most young men, I believed I was Superman in some form or fashion.  I could not die, absent undertaking some bold and spectacularly-stupid stunt.  This of course was a false belief but most boys and young men share it to some degree or another.  Death was abstract and while I had relatives that met the reaper during those years I was simply unprepared to deal with it -- so I didn't.

As the years have passed more people that I know have had their sand run out; several long before, in my view, it should have.  But my view doesn't matter as I wasn't in charge of filling those hourglasses originally.  That right belongs to the man upstairs, and despite anyone being able to ask "Why?" it is only through a rather extreme showing of arrogance that I, or anyone else, could claim the right to an answer.

Today marks a time of the year in which renewal is promised; the renewal of spring, in which longer and warmer days brings the renewal of agriculture, without which we would fall into famine and many would perish. The world around us blooms in color, promising fruits and growth in the months ahead.  

But for those of us already here today and tomorrow should bring reflection and perhaps self-examination as to whether the time we spend irrevocably, and which we cannot recover and repurpose, should be put toward something better suited to the nature of that which we are expending.

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2014-04-18 11:05 by Karl Denninger
in Consumer , 339 references

This sort of thing makes my blood boil, and not for the reasons you may think:

If you think cars are getting too expensive, you may be right. A new report shows that the average price of a new vehicle is out of reach for people in medium-income households in all but one of the 25 largest metro areas in the U.S.

The report by shows that Washington, D.C. is the only American metropolitan area in which a family earning the city's median income can afford the average price of a new vehicle, which was $32,086 in 2013, according to Kelley Blue Book. That price equates to a monthly payment of $633, assuming the buyers put 20 percent down, financed for 48 months and principal, interest and insurance did not exceed ten percent of the household's gross income.

$32,000 for an average new vehicle is utterly nuts.

Flat-out, stark raving nuts.

First off, virtually nobody puts 20% down on cars any more; almost everyone I have heard from or about is buying them with 100% financing -- which is stupid all on its own, because if you don't take GAP insurance and wreck it you're totally screwed.  If you do take GAP insurance then you're paying for yet another service and your monthly cost goes up even higher.

Second, there is this claim that the car should be "no more" than 10% of household gross income.  What are you smoking over there?  We are talking about two-income households, right?  So now we're also talking about two cars, right, or is the second person walking to work?  20% of household gross tied up in vehicle payments and insurance?  

Are you stark raving mad?

To put some percentages on this that actually matter my "reasonably safe" financial leverage limit for most people stands at 28% maximum for all fixed housing-related expenses, which means principal, interest, hazard insurance, any mandatory association or coop fees and property tax (or rent + tenant insurance.)  The maximum safe leverage limit for all fixed obligations (including housing and transportation) is 36%.  That means that you can afford one vehicle that has a carrying cost of 8% of your gross assuming no other debt of any sort, such as credit cards or student loans, if you are up against the 28% maximum on housing expenses.  By the way note that taking on that 8% obligation means you are locked into not taking any more debt until either your income rises or you pay off the note -- it is not just a "qualify and then do what you want" ratio.

But this, by the way, this is not what you'll be sold at any dealer.  If you actually run to my limits (36% maximum gross income obligation against housing and transportation) you will find that your household is pretty damn tight on money.  Not desperately so, but moderately.  That means you won't be buying fancy vacations nor will you end the month with a bunch of extra cash allowing you to go out on shopping sprees and spend it.  Instead you will be coming to the end of the month juggling a few things -- that night in the bar will burn your last disposable $50 but you'll still manage to hit the match on your 401k at work -- barely.

If you go the limits "recommended" by the "finance guys" you will instead be eating Mac-N-Cheese on a fairly regular basis or you will start doing really bad, destructive things -- like carrying a credit card balance from month to month, having zero in cash reserves and, when the inevitable bad thing happens that requires you to spend a few hundred dollars without prior warning or planning you will be screwed.

I am not surprised though.  What did surprise me, as I recently shopped for a new car (and ultimately bought one as I wrote about here a few weeks ago) was how utterly outrageous vehicle prices had gotten over the last few years in comparison to what you actually got for your money.

Why, one might ask?

That's pretty simple -- the financialization of vehicles has advanced to the point that we no longer do "traditional" car loans from a bank or credit union, or paying cash, as our primary means of purchase. This has taken what should have been a dramatic and continuing technology improvement process that reduces price and led to everyone along the way, from manufacturers to banks to dealers scalping all of the value add from that process for themselves, increasing prices so that all but the last ten cents of that value goes to them and only a tiny bit comes to you.

This is exactly what has happened in both education and health care -- and what happened in housing as well.

This pattern is self-destructive for the economy as a whole but it will not stop until something breaks the financialization model -- and there is no indication we're going to see that from the car industry or the finance industry any time soon.

Can you fight back against it?  Yes and no.  Unfortunately this same trend causes used prices to rise too, so there is only some defense available by buying a quality used vehicle instead of a new one.  But what you can do is stop playing "I need a Lexus" and start showing the car dealers the back of your head on a regular basis.

I don't think that's going to happen, however, which makes this a problem that we're going to have to deal with for some time to come -- right up until it blows up in all of our faces in aggregate, just as college loans and medical spending are destined to.

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Oh oh....

Jews in the eastern Ukrainian city of Donetsk where pro-Russian militants have taken over government buildings were told they have to "register" with the Ukrainians who are trying to make the city become part of Russia, according to Ukrainian and Israeli media.

Jews emerging from a synagogue say they were handed leaflets that ordered the city's Jews to provide a list of property they own and pay a registration fee "or else have their citizenship revoked, face deportation and see their assets confiscated," reported Ynet News, Israel's largest news website.


You might want to pretend that stuff like this doesn't happen in the world any more. The sad fact is that it appears that it does, and now the difficulty is determining whether this is some sort of hoax or whether it is in fact part of the so-called "separatist" people who are trying to take over part of eastern Ukraine.

If the latter then some very difficult decisions need to be made, particularly in light of what Putin has used as justification for what amounts to an invasion of Crimea.

That would make the situation, on balance, a bit dicey folks......

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Sit down, shut up, and take responsibility for your life as the adult you are.

There.  I said it right up front.

To whom?

Sharon Gochenour.

Who is that?  The crazy chick who wrote this diatribe:

The first thing—the reason I'm writing this article, and the reason I find it almost impossible to write this article—is that I went to the Massachusetts Institute of Technology for my bachelor's, starting in September 2006 and graduating with a degree in "Art and Design" (that means architecture) in June 2010. I usually tell people who ask that I went to school in Boston. This, besides being a factual inaccuracy, adroitly captures my ambivalence about the whole experience.

Oy.  First, Sharon is upset because MIT is, well, competitive.  Guess what darling?  So is the real world.  If you don't like that then you have options.  You can flip hamburgers or spin pizzas.  You can mop floors.  You can do all sorts of things.

But what you can't do is expect world-class opportunities to be dumped in your ****ing lap because the world is not your oyster!  It is, like it or not, filled with other people who are kinda interested in eating the same lunch you want to gobble down.

Now you can take the scraps or the caviar.  But to get the caviar you might have to whack other people over the head -- or stomp on their heads.  Did your parents not tell you this?  Go bitch at them if not.

Incidentally, it's perfectly fine for you to say "No!" to all of that.

But then you don't go to MIT!

Yes, I am bitter.

I am bitter that forty-eight hours of class and study per week was the official minimum expected of us, and that sixty hours of coursework was totally unremarkable.

I am bitter that when I had personal crises -- I got dumped by my freshman-year boyfriend, my family's home and business were flooded, I felt abandoned and directionless in my major -- I had so little energy left for coping that my life slipped out of control.

What the hell do you think is going to happen in the real world?

Let's say you go get a job tomorrow drawing, well, how about buildings?  You know, what you went to study?  Yes, architecture.  Let's also say you're really good at it.

You get hired to draw a building.  A very expensive building that costs millions of dollars.  It has a schedule to be built and the guys and dolls who put that together start selling the space in it.  Space that doesn't exist yet, because, well, you have to design it so they can build it.

You know, that job you have?  Yes.  You are under quite a bit of pressure to perform, yes?

Now, something bad happens.  Your Dad dies.  That's something that happens. All people die. Your father will eventually die.  Mine recently did.  It sucked.  I'm not going to tell you it didn't, because it did.  It will suck when your father dies too, if you have any sort of relationship with him at all.

There are lots of other bad things that happen to people too.  You might get married (real good, right) but then your spouse might decide to file for divorce.  They might make your divorce into a nearly 2 year hell complete with all sorts of false claims you have to defend yourself against, never mind the crazy amount of money you will spend in the process.

That's just an example, by the way.  There are dozens of others, all of them hypothetical but all of them very real risks.  We all face them every day; that's part of life.  It's not all roses darling; there are lots of thorns along the way!

If you think that studying 60 hours a week was hard, wait until something like that happens and you have to discharge your duties at a job at the same time you're dealing with a very personal and serious issue that is consuming your mind (and possibly your wallet as well!)  

Oh, and if you don't deal with it and get fired?  Now you've got more and very-pressing issues to deal with that go far beyond psychological pressure -- like buying food, shelter and the other necessities of life!

That's real life.  That's how it works.  And yeah, it sucks real bad but this is commonly called "adulthood" and whether you like it or not it's part and parcel of being an adult.

Indeed, this is arguably the defining difference between childhood and adulthood.  When you're a child these challenges are someone else's to deal with, at least the really big ones.  Sure, you still have to handle the emotional issues but you have others who are responsible for making sure the water bill is paid so you can take a shower -- and a crap, never mind having heat in the building (or a place to sleep!)  With adulthood comes the responsibility to manage these things on your own even when life really, really sucks.

What I want to see is an educational environment where there is not so much pressure, both subtle and not-so-subtle, to cut yourself loose from your support networks to go to a school like MIT. I want for students to respect their own needs for sleep, good food, and social interaction, instead of seeing those as some sort of "concession" to their weaker human natures.

Moreover -- though this would require change in the entire American system -- a strong educational environment needs to be free of the overhanging shadow of debt. Debt forces people into untenable and unproductive situations, like taking seventy hours of coursework rather than registering for another semester, or dropping activities they love rather than risking their grades over a scholarship.

Well, you got one thing right -- get the damn debt monster out of education.  You know how you do that?  You get the government out of it.  You stop treating student loans as "special" and instead treat them as unsecured credit cards as they were before the 1980s and beyond.  

Now lenders won't loan you crazy amounts of money because if you blow up they lose it instead of being able to hound you for it.

I suspect you had a basic economics class at MIT.  If you did you probably heard of this thing called "supply and demand."  It works everywhere it's allowed to.  We destroyed it in the 1970s and 80s by creating the ability to borrow money to go to school through various vehicles, all of them backed in some form by government force.  This of course created a lot of people who showed up waving money at colleges and they responded by ratcheting up the price.

Like every financialized thing we ever do the colleges and lenders got together and figured out how to take all but one dime of the value of their education out of your ass right up front.  This is why your "education" was so damned expensive and why, on balance, it's usually not worth it if you have to go for more than four years -- and often even if you can manage to get out on the original plan!



Well, guess what?  It was rainbow-chasing bull****!

Now I understand being bitter that you were deceived.  But you should be bitter at the college, at your High School which probably pimped this path to you in exactly that fashion emotionally if not financially and you probably ought to be really*****ed at your parents who probably did the same because their first and foremost job as parents is to give you the tools, emotionally and otherwise, to be able to deal with life (including detecting and calling "BS" on those who run this sort of exploitive crap) as an adult.

Students (even very smart ones!) are people, not tools needing to be ground into their proper shapes. They need to be encouraged and allowed to grow. 

You're an adult, Sharon.

Yes, you were hoodwinked.  I'll give you that without seeing your evidence, because I'm damn near sure it's true.  I've been writing about this very point for years; indeed, it's part and parcel of the book you can find advertised to the right of this article.

But there are two options available to you when this sort of realization visits you as an adult.  

One is constructive and one is destructive.

The destructive (to yourself) choice is to bitch, whine, and blame other people, while putting forward vague claims that others have a "duty" to "encourage and allow you to grow."  That's self-destructive because you are refusing to recognize the part of the scheme that you willingly participated in and, in addition, you're not altering your behavior and evaluation of others -- which played a major part in how this happened to you.

The constructive choice (for yourself and others) is to make damn sure the people responsible are held to account to the extent you were lied to or misled, take responsibility for the part of it that was your unrealistic expectations and the chasing of claims that you should have known with even a basic understanding of mathematics were impossible to achieve and do your level best to change things so those who follow you cannot be similarly hoodwinked as you were.

Your choice Sharon.

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Gee, I wonder how many people simply won't look -- but damn well should.

I've used both an iPhone and a BlackBerry for more than five years — and the Z30 impressed me so much that my iPhone 5S lost its appeal. I've stopped using my iPhone and now use the BlackBerry Z30 exclusively.

Uh, yep.

It's interesting seeing this coming from CIO.  And what's not even brought up is that if you have infrastructure at your company behind it you can partition the device so that it has two workspaces -- one in which the company has control and the second in which you do, and the two are distinct and secure from one another.

Another nice feature -- auto-connect of VPN service on any desired WiFi hotspot.  Open WiFi is nice for its performance and convenience (never mind not hitting your data quota on your cell connection.)  It's horrible from a security point of view, however, in that literally everything you send or receive can be seen by anyone within a couple hundred feet!  Most people don't think this is such a big deal but they should as anyone else in that nice cafe you're sitting in (or, for that matter, in their parking lot!) may have their laptop in "promiscuous" mode and be silently capturing everything you do!

The auto-VPN connection setting eliminates this problem; when you connect to said saved open WiFi hotspot the phone will automatically bring up the VPN connection back to your home or corporate gateway thereby encrypting all traffic over the open WiFi network and securing it.  Now you can have your cake and eat it too.  Once it's set up you don't have to remember to do anything and the enabling of this mode is shown with a little key on the top info bar of the screen.

Finally, the other feature that is mentioned is the "picture password."  I've had a great deal of fun with this when out drinking with my friends.  A couple of times I have described how it works (the number I selected must be at the place on the picture I previously selected) unlocked the phone while they are studying me do it in full view of the screen, then locked it and handed it to them.

You'd never let someone study you putting in your password on either Android or IOS (whether numeric or the "drawing" one on Android) because with any close observation at all there's a very good chance you just gave them your code.  While I'm sure that if you were to video record a BlackBerry user unlocking the device a sufficient number of times you could determine what it is, the expected risk through casual even if intentional and studious observation can be classified as "slim and none, and Slim just went home."

The other advantage to this mode of unlocking is that in addition to being quite secure it's fast; long alphanumeric passwords are secure but slow.

Sometimes you really can have it all.

H/t: stcm

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