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Matt Kuchar should have paid his caddie the correct rate

MAtt Kuchar Ortiz

Matt Kuchar has earned well over $45m in prize money playing golf. Last November he did something the judgemental among us can enjoy. Kuchar, 40, won the Mayakoba Golf Classic in Mexico and banked the $1,296,000 winner’s cheque. His regular caddie was unavailable. So Kuchar hired local man David Ortiz. Caddies typically get 10% of first-prize winnings. Kuchar gave Ortiz $5,000. “He was definitely my lucky charm,” Kuchar said. “He brought me good luck and certainly some extra crowd support and did a great job as well. He did just what I was hoping for and looking for.”

Fair pay? In a way, it was. Kuchar and Ortiz had agreed a $4000 payment for a Top 10 finish. The extra $1000 was a bonus. Kuchar recognised that the $4,000 was low, so he topped it up by 25%. But that was a low act.

And then it got worse. Ortiz politely asked Kucha’s management to dig deeper. How much would be enough? Ortiz gave the figure: $50,000 – still less than half what a regular caddie could expect. Kuchar’s agent offered him $15,000. Ortiz then did the smart thing: he talked to the media. Journalist Michael Bamberger spoke to Kuchar. His reply is worth repeating. “I kind of think someone got in his ear,” said Kuchar. “For a guy who makes $200 a day, a $5,000 week is a really big week.” Bang! Bamberger had a story of greed and entitlement anyone can tuck into.

Faced with bad press, Kuchar spoke about the matter:

“It’s kind of too bad that it’s turned into a story. I really didn’t think it was a story because we had an arrangement when I started. I ended up paying him $5,000 and I thought that was more than what we agreed upon. So I certainly don’t lose sleep over this. This is something that I’m quite happy with, and I was really happy for him to have a great week and make a good sum of money. Making $5,000 is a great week.”

Oh dear. But then after more unfavourable reaction to the stinginess and reports of heckling at a subsequent tournament – “Go low, Kuch…just not on the gratuity!” yelled one spectator off the sixth tee. Fans cheered a missed putt on the 12th, and chants of “Mooch” could be heard throughout the day” – an apology finally arrived. Kuchar agreed to pay Ortiz $50,000:

“This week, I made comments that were out of touch and insensitive, making a bad situation worse. They made it seem like I was marginalising David Ortiz and his financial situation, which was not my intention. I read them again and cringed. That is not who I am and not what I want to represent. In this situation, I have not lived up to those values or to the expectations I’ve set for myself. I let myself, my family, my partners and those close to me down, but I also let David down. I plan to call David, something that is long overdue, to apologise for the situation he has been put in, and I have made sure he has received the full total that he has requested.”

When you tell the media first that you plan to call someone you short-changed and belittled, it’s all about the publicity. Kuchar pressed on:

“I never wanted to bring any negativity to the Mayakoba Golf Classic. I feel it is my duty to represent the tournament well, so I am making a donation back to the event, to be distributed to the many philanthropic causes working to positively impact the communities of Playa del Carmen and Cancun.For my fans, as well as fans of the game, I want to apologise to you for not representing the values instilled in this incredible sport.”

Screw the eponymous donation to the needy and the grandstanding. Just pick up the phone to Ortiz, apologise and on the quiet pay the guy the full whack. Don’t stop at $50,000. Pay him the $120,000.

Kuchar’s regular caddie, John Wood, then chimed in: “Nobody’s perfect. All we can do when a mistake is made is reconsider, apologise and make amends… To crucify for one mistake feels wrong.”

It does. But when anyone hears the name Matt Kuchar, they’ll always remember him for what he did wrong.

Posted: 19th, February 2019 | In: Key Posts, Money, Sports | Comment


Phone lottery scammer tried to con former CIA and FBI boss William Webster; scammer lost

William Webster lottery scam

Keniel A Thomas, 29, was a scammer who could not fail – not until he called William Webster (born March 6, 1924), the man who served as chief of the CIA and FBI. Thomas is now serving a six-year sentence. “Everybody’s vulnerable every grandmother, every grandfather,” said the former spy chief’s wife, Lynda Webster. “It seemed to me that something wasn’t quite right,” said Webster, 94. “This was pretty obvious to me that there was something fishy about it.”

The calls to the Webster home started in March 2014, with various men calling to tell William Webster he had won the lottery. In June, Thomas began calling, identifying himself as “David Morgan,” a manager with Mega Millions. However, Webster saw that he had an email address of keniel.thomas@outlook.com. He asked “Morgan” to stop calling, but Thomas not only continued to call but also sent more than 20 emails to Webster. At one point in July 2014, Thomas called Lynda Webster and told her that he knew no one was at her home the previous night. In another call, Thomas told Lynda Webster, “So easy that we go set your house ablaze, how is that? … You can be taken care of that easy.”

The FBI was able to link the Websters to other victims who had reported sending funds to Thomas or interacting with “David Morgan,” or who had sent funds to American middlemen who were also victims. Agents tracked payments through Western Union and MoneyGram to Thomas or members of his family, court records show. One California man reported receiving certified checks in exchange for sending “fees” to Jamaica, and wound up sending $85,000 to the scammers even though the certified checks all bounced.

Spotter: Washington Post

Posted: 13th, February 2019 | In: Key Posts, Money, News | Comment


The Pool RIP: people will pay for what they enjoy reading

trump magazine

Claire Woodward looks at the end of The Pool, the website for women by women that ran up crippling costs in quick time. Harking back to the era when magazines were must-haves for any teenager, she recalls hours spent devouring PippinTwinkleBuntyJintyJackieWhizzer and ChipsCor!Smash Hits, Disco 45Look-In, The BeanoThe DandyMelaniePinkBlue Jeans.

I used to read everything and anything – Tiger, Blue Jeans, Whizzer & Chips, Just 17, MAD, Resale Weekly (a trade magazine for plant machinery), my dad’s old Laugh comics from the 1950s, Punch and Women’s Own. Says Woodward:


This is a long-winded way of saying how said I was to read of the demise of women’s website The Pool, which went into administration yesterday. It was a bold, funny, relevant website for women that used a lot of great freelance writers, but it was all available for free, like the content of BuzzFeed, who announced editorial cutbacks this week. The Pool, like comedian Sarah Millican’s online women’s mag Standard Issue, found it couldn’t survive online without a subscription model (although Standard Issue is still available as a podcast).

It’s tragic, really. Writer Andy Dawson and I were lamenting The Pool’s demise on Twitter, and he wrote: “People think nothing of spending £3 for a coffee but shit their pants at the thought of forking out for something that’ll amuse and inform them for an hour.”

I’ve been thinking a lot about how to make websites pay. Flashbak, WhoAteAllThePies, Spiked-Online all need money to thrive. How do you do it?

Mathew Ingram lost his job at Gigaom in 2015. He talked to Poynter:

“You join these things because you’re committed to them as an idea, not just oh, hey, this would be a cool paycheck and maybe I’ll get some equity out of it,” Ingram said. “It is a lot more like a relationship than a job.” … “Maybe be prepared,” he said, “because it could happen at any time.”

A few ideas to consider. Be prepared for bad news. Wonder why you didn’t have a go yourself. Realise that magazines were always a good way to burn through cash. Journalism is not all speaking truth to power – sometimes it’s about selling shoes. People will pay modest amounts for something they enjoy. Not everyone expects everything for free. The trick is to keep costs low, be ready to go part-time on your labour of love and enjoy it.

Posted: 3rd, February 2019 | In: Money, News | Comment


Italy dips into recession; UK out-performs EU; BBC ignores figures

Italy dips into recession; UK out-performs EU; BBC ignores figures

Something is missing from the BBC’s report on the Italian economy slipping into recession. In the final quarter of 2018, the Italian economy shrank by 0.2%. That followed a 0.1% decline in the third quarter. The BBC tells us:

Growth in the euro area remained at 0.2% in the final quarter of 2018, the same as the previous quarter and in line with analysts’ expectations.

Bad news, then. Time to leave the EU. But hold on because the BBC has more news:

The figures, issued by the Eurostat agency, showed that in the 28-nation EU as a whole, fourth-quarter growth was 0.3%.

That figure includes the UK – which is leaving the EU. But the BBC doesn’t mention the UK’s economy anywhere in its report. It only says:

In contrast to Italy, some other eurozone economies expanded more than expected, with France and Spain posting growth rates of 0.3% and 0.7% quarter-on-quarter respectively.

In the third quarter of 2018, the UK economy grew by 0.6%. The next quarter looks to have produced a rise of 0.4%. Why doesn’t the BBC think this important to mention? Might it have something to do with Brexit, and how Remain-supporting MPs told us a vote for Leave was a vote for a deep recession? George Osborne told us every household would be £4,300 worse off by 2030 if we voted Leave. We didn’t. And we’re not.

Posted: 31st, January 2019 | In: Key Posts, Money, News | Comment


It cost Arsenal £17m to get shot of Arsene Wenger

wenger

It took more than placards and hashtags to defenestrate Arsene Wenger from Arsenal. Sky says it took £17.1m. Not that he got the lot. The Times says the £17m was paid to Wenger and his staff on condition of them leaving pronto.

Wenger had a year left on his contract when he sacked after 22 years in charge – and a decade at the helm of a club resting on its laurels. Of Wenger’s key staff, Steve Bould remained as assistant manager. You may wonder what the stalwart defender of George Graham’s fabled Arenal back four, one of the key exponents of ‘If in doubt, kick it out’ defending, is coaching the current feeble backline. Maybe in his head Bouldy was beating two players, shimmying past the ‘keeper and scoring for fun, and seeks to live out his dream in the unlikely shape of the insufferable and wholly useless Shkodran Mustafi. Arsenal fans will settle for the practicality of defenders taking out a man and ball in no-nonsense challenges and flicking it on at near post corners routines.

What Bouldy earns is not revealed. But the club’s latest accounts show that revenue dropped from £422.8 million to £388.2 million. And that Ivan Gazidis – aka Ivan The Terrible – got a pay rise before she legged it to AC Milan.

Posted: 29th, January 2019 | In: Arsenal, Back pages, Money, Sports | Comment


Brexit: On Corporation Tax and offshore UK

The Guardian has something to say about Corporation tax. If your company is based in the UK, it pays Corporation Tax on all its profits from the UK and abroad. The current rate is 19%. The Government is set to reduce it to 17% in 2020 – in line with Singapore, which just pulled Sir James Dyson. Because the tax based on companies’ profits this dynamic tax (one that responds very swiftly to change) is very difficult to forecast. But the Guardian is clueless about how it works:

Corporation tax receipts have increased since the financial crisis, although profits of firms have risen as the economy has recovered

Guardian tax
Not quite. No.

“Although”?! No. Tax is up BECAUSE profits are up. That’s how Corporation Tax works. It also doesn’t work in isolation. There are other taxes, such as the banking levy. And economic growth leads to higher profits and thus higher levels of tax receipts. Of course, in the current political climate making any forecasts on company profits is set in water.

Posted: 28th, January 2019 | In: Money, News | Comment


Carl Benjamin versus the bowdlerized Web

carl benjamin

‘Validate me’

 

Carl Benjamin, aka Sargon of Akkad, is no longer appearing on Patreon, the funding platform self-explained as: “Patreon is a membership platform that makes it easy for artists and creators to get paid.” Or not. You only get on if you’re the right sort of artist making the right sort of art. And Benjamin is the wrong sort. He’s been booted from the platform for breaking the “community guidelines” on hate speech. And here’s the hook: the verboten content was found in an interview Benjamin gave to a YouTube channel. He’s heard calling a sneer (is that the word?) of alt-right trolls “niggers” and “faggots”. Patreon published the transcript of the video. Benjamin explains why he doesn’t like the alt-right crowd and compares them to “white niggers”.

Patreon added: “As a funding platform, we don’t host much content, but we help fund creations across the Internet. As a result, we review creations posted on other platforms that are funded through Patreon. Sargon is well known for his collaborations with other creators and so we apply our community guidelines to those collaborations, including this interview.”

Benjamin is tainted. In conversation with Fraser Myers, of Spiked, Benjamin says: “Ever since I started my YouTube channel, I’ve always been politically incorrect – it is what I do. I had never had a problem with Patreon before because its terms of service were quite specific. They said it had rules around hate speech on its platform, which I think is quite fair and so I didn’t want to break them.” Isn’t anyone who sets out to be politically incorrect less a champion of free speech than a narcissist trying to cause offence, defining themselves by what they are not rather than what they are? He adds: “I think Patreon is trying to sanitise its platform and looking to remove people who the mainstream politically correct establishment find offensive. (I am offensive, of course!)” 

Free speech isn’t about being rude and seeking to cause offence for the sake of it. That’s puerile, crass and cheap. Free speech is simply speaking your mind and testing your thinking. Sharing only increases the goodness. But increasingly, the web is being divvied up into echo chambers. If Patreon isn’t for you, where is? 

Fox has more:

A pair of influential Internet social and political commentators are putting their money where their mouths are, ditching crowd-funding site Patreon over its hate speech rules despite not having any viable alternative.

Dave Rubin raised money for his YouTube show, “The Rubin Report,” through Patreon until recently when he decided to fight back after the crowd-funding site banned participants who used language deemed offensive by the service. Best-selling author Jordan Peterson, a frequent Rubin guest whose lectures draw millions of views on YouTube and who gets funding from the service, joined Rubin in walking out on Patreon.

“The reason that Dr. Peterson and I are leaving Patreon on January 15, despite it being something like 70 percent of my company’s revenue, which I’m voluntarily giving up, is that it is time for someone to take a stand,” Rubin said Thursday on “Tucker Carlson Tonight.”

Surely the open market will create a new space:

“Dave Rubin and I (and others) have been discussing the establishment of a Patreon-like enterprise that will not be susceptible to arbitrary censorship, and we are making progress, but these things cannot be rushed without the possibility of excess error,” Peterson wrote last month.

As ever: follow the money. 

Posted: 7th, January 2019 | In: Key Posts, Money, News | Comment


How to make money from immigration without a boat

Who makes money from jailing asylum seekers? Of the UK’s 10 immigration removal facilities just one is run by Her Majesty’s Prison and Probation Service. G4S, Mitie, Serco and US-owned GEO Group operate the other nine. So there must be money in it, right? The Government’s Contracts Finder site reveals the value of contracts when they were awarded – but not all figures are shown. But by way of an example, in 2018 Mitie secured a 10-year deal worth £525m to escort immigration detainees on removal flights to detainees’ home countries and manage airport holding rooms, reporting centres and two short term holding facilities. Mitie declared itself “delighted” at the deal. 

The Daily Beast looks at how outsourcing immigration to private companies in the US pays:

“In 2018 alone, for-profit immigration detention was a nearly $1 billion industry underwritten by taxpayers and beset by problems that include suicide, minimal oversight, and what immigration advocates say uncomfortably resembles slave labor.”

Of course, that’s not to say no problems existed when the state ran immigration centres. It’s useful to ask why the service was outsourced in the fist place. But profit margins seem very generous. In 2017, the Guardian noted a 20.7% profit margin at Brook House in 2016. Brook House at London’s Gatwick Airport is run by G4S. The same company runs Tinsley House, also in Gatwick. The margin was a whopping 41.5%.

The Beast adds: 

Expanding the number of immigrants rounded up into jails isn’t just policy; it’s big business. Yesica’s employer and jailer, the private prisons giant GEO Group, expects its earnings to grow to $2.3 billion this year. Like other private prison companies, it made large donations to President Trump’s campaign and inaugural.

GEO is involved in prison design and electronic tracking:

Pinning down the size and scope of the immigration prison industry is obscured by government secrecy. But the Daily Beast combed through ICE budget submissions and other public records to compile as comprehensive a list as possible of what for-profit prisons charge taxpayers to lock up a growing population, and how many people those facilities detain on average. The result: For 19 privately owned or operated detention centers for which The Daily Beast could find recent pricing data, ICE paid an estimated $807 million in fiscal year 2018.

Those 19 prisons hold 18,000 people—meaning that for-profit prisons currently lock up about 41 percent of the 44,000 people detained by ICE. But that’s not a comprehensive total, and the true figures are likely significantly higher.

Prison pays. Why shouldn’t it? Profits are not guaranteed. In 2015, profit margins for operators in the UK fells to between 5 and 7 per cent.

Richard Garside, director at the charity Centre for Crime and Justice Studies, takes a view: “If the state is going to detain someone, it should be under the auspices of state agencies, not the private sector.” Cynics would argue that Governments grew tired of botching immigration on their own so seduced private firms into the mess. The profits are compensation for reputation damage.

Posted: 3rd, January 2019 | In: Key Posts, Money, News | Comment


What Jose’s hotel cost Manchester United in rent

lowry hotel mourinho

 

Freshly sacked by Manchester United, surly Jose Mourinho is back living at his London home. The Riverside Suite at Manchester’s Lowry Hotel, where he stayed since July 2016, is available to any new manager unwilling to commit to living in the city. But what was the bill for Mourinho’s stay?

The Sun: “Jose Mourinho hotel: Inside the exclusive Lowry where axed Man Utd manager lived for 895 days and spent £779,000 on rent.”

The Mail: “Jose Mourinho finally checks out of the Lowry Hotel… after 895 days and an astonishing £537,000 bill.” Although the Mail also notes: “What’s so special about the Special One’s £600,000 hotel suite? That’s the bill Jose Mourinho ran up in nearly three years.” Are we including tips?

Does the Lowry charge the Sun’s holidaymakers more than Mail guests? But the bill could have been higher. In January 2018, 442 magazine told us: “If Mourinho stays at the Lowry until July 1 2021, it will have cost him £1,489,200.” That figure is based on the rooms costing £816-a-night. But the Guardian can get the same digs for £600-a-night. 

It pays to shop around. 

 

Posted: 31st, December 2018 | In: Back pages, manchester united, Money, News, Sports | Comment


David Dimbleby and why the Posh live in a meritocracy

Are you posh? I’m asking for David Dimbleby, the hereditary BBC journalist, former Bullingdon Club member, pal to Prince Charles and whose son attended Eton College. His fellow BBC lifer John Humphrys asked Dimbers if he was a posho. Dimbleby thought the question not rhetorical and replied: “I come from Wales, as you do.” So he is Posh, then, at least as privileged as his nation’s prince. Of course, what Dimbleby’s doing is denying his poshness. The old sod pitches himself as an outsider, a man of the valleys and so very unlike those entitled and titled toffs in Berkshire (Thatcham) and London (Newham). 

Kenan Malik cites Dimbleby’s egotism – that stated belief in success founded on merit rather than dumb luck and membership of an elite tribe – in his article on the rise of meritocracy and those who can afford to live in one. Dimbleby is the product of talent and hard work. His rank played no role. Now read on:

So entrenched as a social aspiration has meritocracy become that we often forget that the term was coined in mockery. In his 1958 satire, The Rise of Meritocracy, the sociologist Michael Young told of a society in which classes were sorted not by the hereditary principle but by the formula IQ + Effort = Merit.

In this new society, “the eminent know that success is a just reward for their own capacity”, while the lower orders deserve their fate. Having been tested again and again and “labelled ‘dunce’ repeatedly”, they have no choice but “to recognise that they have an inferior status”.

Young’s dystopian meritocracy doesn’t (yet) exist, but we have something perhaps worse: the pretence of a meritocracy. The pretence that talent will achieve its just rewards in a society in which class distinctions continue to shape educational outcomes, job prospects, income and health.

Malik argues that rank is now based on education. Is admission to top colleges a meritocratic process? It’s competitive. How do you get the edge? How do you know where the edge exists if you’ve no access to it?

Today, we simultaneously deride poshness and want to be seen as having the common touch (hence Dimbleby’s outrage at being called posh), while also showing contempt for those who are deemed too common and whose commonness exhibits itself in the refusal to accept the wisdom of expertise and in being in possession of the wrong social values.

Trump supporters, wrote David Rothkopf, professor of international relations, former CEO of Foreign Policy magazine and a member of Bill Clinton’s administration, are people “threatened by what they don’t understand and what they don’t understand is almost everything”. They regard knowledge as “not a useful tool but a cunning barrier elites have created to keep power from the average man and woman”. Much the same has been said about Brexit supporters…

Too true, of course. Tory MP Michael Gove says a second Brexit referendum would tell voters that they’re “too thick” to decide on issues. Labour MP Mr Sheerman, opined: “The truth is that when you look at who voted to Remain, most of them were the better educated people in our country.” 

 

 

Matt O’Brien finds evidence that  “poor kids who do everything right don’t do much better than rich kids who do everything wrong”:

 

meritocracy

 

You can see that in the above chart, based on a new paper from Richard Reeves and Isabel Sawhill, presented at the Federal Reserve Bank of Boston’s annual conference, which is underway. Specifically, rich high school dropouts remain in the top about as much as poor college grads stay stuck in the bottom — 14 versus 16 percent, respectively. Not only that, but these low-income strivers are just as likely to end up in the bottom as these wealthy ne’er-do-wells. Some meritocracy.

What’s going on?

Well, it’s all about glass floors and glass ceilings. Rich kids who can go work for the family business — and, in Canada at least, 70 percent of the sons of the top 1 percent do just that — or inherit the family estate don’t need a high school diploma to get ahead. It’s an extreme example of what economists call “opportunity hoarding.” That includes everything from legacy college admissions to unpaid internships that let affluent parents rig the game a little more in their children’s favor.

David Dimbleby’s dad worked at the BBC, where he hosted the long-running current affairs programme Panorama. David succeeded his father as presenter of Panorama in 1974. Maybe knowledge and know how is inherited, like cash and connections?

Posted: 30th, December 2018 | In: Key Posts, Money, News, Politicians | Comment


‘A physician’s letter to his wife’ – the most condescending letter ever written?

In “A physician’s letter to his wife” the self-styled “The Physician Philosopher” – an  “anesthesiologist who blogs at his self-titled site, The Physician Philosopher” – writes an open letter to his wife. It looks like an online public display of affection, which, to my mind, are often precursors to divorce. You know, those irritating Facebook posts between husband and wife played out because a private conversation is too intimate for such kismet-kissed souls. He calls her “gorgeous”, “talented”  and, in an egomaniacal bid at self-deprecation, “long suffering”. She laughs at his jokes. Narcissism rules. 

And so to “The Physician Philosopher” who schools his wife what to do should he die before her. She should not punch the air, whoop, use bunting nor should she exclaim, “I pity anyone in the hereafter listening to that bore’s preachy horse shit”. He begins, as he must, at the beginning:

Let’s just start at the beginning.

If you’ve made it past that without rolling your eyes into your skull, read on…

When we first met, you thought I was arrogant and prideful. For two and a half years we would rarely talk while we walked past each other in our small college town. At the time, we never could have imagined that one day we would get married. In a twist of irony, two weeks before we started dating you still didn’t know as you told one of your best friends, “I could never date a guy like him. He is too sure of himself.”

Then something changed.

You wanted to talk late one night outside of your dorm. We even got yelled at for talking too late into the night. We first became friends, then we became best friends, and then you become the love of my life. Ten years of marriage and three kids later, you still have my heart and always will.

You made me a better me. 

You are the most caring, compassionate, and forgiving person that I’ve ever met. I guess God knew that you’d need those qualities in order to be married to me – particularly that forgiveness part. When you make as many mistakes as I do, a lot of forgiveness is required.

I tell everyone every day that you are a better person than me, and I’ll continue to say that to the grave. But if I should make it to the grave prematurely, I want you to have this letter to guide you on exactly what you should do for our family.

And now it gets fist-bitingly awful:

Financial plan

When I die, you’re going to realize that you are immediately financially independent. If not, reading this will teach that to you.

Do one! 

With the money, you’ll be able to pay off all of our debts and have more than enough to last as long as you and the kids live. That said, you are likely to have no idea what to do with it given that you’ve always trusted me with the big picture of our finances. (We need more money dates, apparently).

So, I’m going to walk you through exactly what you should do with it.

Furs. Diamonds. Unsuitable Men?

Cash in my life insurance

You need to get my term life insurance policy. It’s in the folder in my desk.

Call the insurance company up and tell them the bad news. And then call my workplace and do the same thing (I have a life insurance policy at work, too). Tell them you’d like to collect the full sum of money. I’ve done the math and this amount of money should allow you to do whatever you want to do with your life.

After you realize your awesome financial situation, make sure to change all the beneficiaries on your estate planning documents to the kids. I won’t need to be your beneficiary anymore for obvious reasons.

You still there? He hasn’t finished. 

Cash in my life insurance

After you get the money in hand, you will be able to pay off all of our debt with ease, including our house. Hopefully, we’ve done well enough by the time that you need this that the mortgage is all that is left.

It’s worth saying twice: pay off the debt before you do anything else.

It will make life easier for you and the kids. Also, consider fully funding our kids college education by putting $100,000 into each kid’s 529 plan and letting it grow until they need it.

Nicole Cliff interjects: “If Steve left me a letter this condescending in his effects I would liquidate every single account and give all of it to lesbians. Just random lesbians. Then I would eat my children.”

You have to do some math

I know that you don’t like math, but you’ll have to do some.

I’m rich! I’ll hire a mathematician. Then shag him to deathbed on the solid gold sun lounger I bought.

After paying off all of our debt, you’ll have a certain amount of money left. If you multiply that number by 3% (Total money x 0.03), that is the amount of money that you can spend annually and rest assured it’ll last as long as you need it.

It should be a lot more than you need.

If you decide to keep working, because I know you – and that’s what you’ll likely do – just subtract your annual income from that number above and draw less out of the account. It’ll give you an even better chance that it’ll last long enough and you can give what is left to the kids someday.

Tom Jamieson interjects: “Teach the children how to make that lovely tea you insisted I drink every night before bed. The one that tasted faintly of burnt almonds my dearest, as each day I grew weaker and weaker until near the end, you had to hold the cup to my lips in your kind sweet uncomplicated way.”

You have to do some math

Take $100,000 of the money and put it into a Money Market Account for an emergency fund. This should cover any unexpected expenses that arise. Also, feel free to give me the cheapest funeral possible. No one will be looking at my casket when it’s underground ten years after I die. A wooden box will be just fine.

Put all of the rest of the money into a taxable account at Vanguard. Put 50% into the total stock market index fund (VTSAX), 25% into the total international stock market index fund (VTIAX), and 25% of the money into the tax-exempt bond index fund (VTEAX).

Take any money I have in my work retirement plans and simply roll it over into an IRA at Vanguard. Since the money in this account will hopefully be dwarfed by the money from my death that you’ve placed into a taxable account, you can put 100% of this money into the Vanguard Total Bond Market Index Fund (VBMFX).

If you need help, call Vanguard. They are great. If you still need help, call a fee-only financial advisor who operates as a fiduciary for a flat-fee.

Tom Jamieson has a word: “look after our children. You’ll find them in the smaller rooms adjacent to our master bedroom, They are called children’s bedrooms and that is where they sleep.”

Speaking of help

Ask our lawyer friend at church to help you make a trust for the kids and plan for our estate. Your money will likely grow while you are taking it out at 3%, and so you want to make sure that the kids won’t get hammered by massive estate taxes.

If you need help with the financial stuff, feel free to look at my recommended financial advisors list (coming soon!). I’ve vetted them myself. Or, I am sure, that many of my financial advisor friends will reach out to you to offer help.

Jennifer Van Goethem interjects: “So, looks like the lesson here is trust your first impressions.”

Speaking of help

You know one of my favorite things to do is to give to other people. And I know you’ll do the same. But it would make my heart happy if you found some people who really needed help and gave them a leg up in life.

Oh, and pay for the medical school to support someone who will start a curriculum to teach the students about money. It’s important stuff, and it just may save them from burnout so that they can save you and our kids someday.

Verity Reynolds interjects: “There are three children. That is more than two and less than four. I know how you hate math.”

Life plan

First of all, recognize that my death wasn’t too soon. It was right when it was supposed to be. You and I both know that there is a bigger calling in this life, and I hope that you continue to teach our kids the selfless love of Jesus.

I also hope that you find love again. This life is too short to live it alone. Just make sure he loves you, and loves our kids. (Also, make sure he signs a prenuptial agreement given all that money stuff we just talked about. 🙂 )

Continue to teach our kids to be selfless, respectful, and to put others first. Spend time with them and support their passions.

Brian Roemer interjects: “There’s not a jury in the world that would convict her.”

You may not realize this, but families who have money usually lose it by the third generation. So, don’t let our kids touch any of their non-college money until they are 24 at the youngest. Continue to teach them about money. Make sure they associate hard work with earning money. And make them give you a plan for what they want to do with it.

Tell our oldest little philosopher that she is brave, inquisitive, and sweet. I pray that she always continues to stay that way. And tell her that I am proud of the little woman she has become. My hope is that she stands up for those who can’t.

Hillary Rowe interjects: “Dear wife, I’m writing you this open letter to make sure the whole world knows that I (appear to be) financially controlling you, and I demand that same level of control after my untimely death.”

Tell our only son that, while I wasn’t always the best at understanding his emotions, I love his empathy. That is his gift – understanding others. Help him use it to serve others well. Make sure he knows that I am proud of him, and will always be proud of him no matter what he chooses to do with his life.

And to our fiesty Jack-Jack, teach her to harness all of that charisma and fervor. Teach her to love others with just as much passion. I hope that she always possesses a jealous and fierce love for her family.

Take home

To end this open letter to my wife – I want to point out that a chapter of our life has finished. We are selling the first home we had after getting married. The one where we brought home all three of our children, and created our life together over the past nine years. While this is bittersweet, I cannot wait for the memories that we have to come in our new house.

Know that I love you and that, if I die before you, I have cherished every moment we had together, even if I wasn’t always the best at showing it. Continue to love the kids the same way you loved me – unconditionally.

Love,

Your lesser half

Spotter: Nicole Cliffe 

Posted: 15th, December 2018 | In: Key Posts, Money, Strange But True | Comment


Thick and Williams pays millions in tribute to Marvin Gaye

blurred lines marvin gaye

Jackie Wilson, George Michael and a friend

 

Fools and wannabes borrow. Geniuses steal. Robin Thicke and Pharrell Williams are now millions of dollars lighter in the trousers after Marvin Gaye’s family proved beyond any doubt that the pair’s hit song Blurred Lines owned much to Gaye’s 1977 song Got to Give it Up. Thicke and Williams appealed the ruling and lost. Yesterday a new amended judgement confirmed the settlement.

The singers jointly owe damages of $2,848,846.50. Thicke must pay an additional $1,768,191.88. Williams and his publishing company must pay a further $357,630.97. 

The Gaye family is also entitled to prejudgment interest on the damages award and respective profits against each of the signers, totalling $9,097.51. They are also entitled to 50 per cent of the songwriter and publishing revenue. 

Marvin Gaye died in 1984. According to reports, when he was killed Marvin’s estate was $9.2 million in debt. 

Posted: 13th, December 2018 | In: Money, Music, News | Comment


Confessions of a Johnson & Johnson rectal thermometer tester

If you hate your job, think on. First buy a Johnson & Johnson rectal thermometer…

 

If You Think You Hate Your Job, You Need To Read This

dsds

 
When you’ve had an absolute “I hate my job” day, try this:
On your way home from work, stop at your pharmacy and go to the thermometer section. You will need to purchase a rectal thermometer made by Johnson and Johnson. Be very sure you get this brand. When you get home, lock your doors, draw the drapes, and disconnect the phone so you will not be disturbed during your therapy. Change to very comfortable clothing, such as a sweat suit and lie down on your bed. Open the package and remove the thermometer. Carefully place it on the bedside table so that it will not become chipped or broken. Take out the material that comes with the thermometer and read it. You will notice that in small print there is a statement:

“Every rectal thermometer made by Johnson and Johnson is personally tested”

Now close your eyes and repeat out loud five times: “I am so glad I do not work for quality control at the Johnson and Johnson Company”.

Have a nice day everyone and remember, there is always someone with a worse job than yours.

I thought they all worked for RyanAir?

Spotter: TheMetaPicturef

Posted: 7th, December 2018 | In: Money, The Consumer | Comment


Feminism is dead: campaigners say equalising pension ages discriminates against women

We’re really well into Alice in Wonderland territory here as we find out that men and women having equal pensions ages is discrimination against women. Which is odd, because women do live longer than men, thereby gaining their pensions for more years, but that’s not discrimination against men, no sirreee Bob! But raising women’s pensions ages to those of men are discrimination?

Older women were unfairly discriminated against by a £5 billion Treasury reform that increased the female pension age from 60 to 66, a court was told.

Three women who claim that they were not properly informed about the change won the first stage in their legal battle with the government yesterday.

The women, who were born between 1950 and 1953, claim the increase in the pension age discriminates against them on the grounds of their age and sex.

Note that the court hasn’t in fact said that it is discrimination. Only that it’s arguable that it is therefore they should be allowed to proceed with their case to see if they can prove it. But think through what that claim is.

Women had it good for decades, they had to work fewer years before they could retire. They then got their pensions for longer both because they started earlier and also because they lived longer. So, definitely discrimination in favour of women. Ending that is discrimination?

Actually, in this modern world that is how it works yes. You’ll have seen the claims that welfare changes are anti-women, that women lose most from them? Given that there is no gender in these payments, this means, obviously enough, that they must have got more than men under the old system. But that’s not discrimination, only removing that privilege is?

‘T’ain’t fair, is it?

Posted: 3rd, December 2018 | In: Key Posts, Money, News | Comment


Political manipulation of money at root of housing crisis

house market bubble

 

The narrative running through political and media characterisation of the housing market goes like this: ‘ever increasing demand for houses, turbo-charged by foreigners looking for a safe-haven, has been met by limited supply causing prices to rise dramatically, writes Jason Leavey.  Fortunately, our politicians and the City are on hand to ensure cheap mortgages are available to help you onto the property ladder to prosperity.

Is it not also plausible that the rapid expansion of cheap mortgage credit has been a causal driver of house price inflation rather than a consequence of it?

On the face of it you might expect widening access to ever cheaper money simply means more people can buy houses more cheaply.  But if the number of houses doesn’t increase to meet demand then more people with more money chase the same properties and prices rise rapidly. Without an excess of supply, above and beyond demand, there is no downward pressure on prices. That is not to say an increasing population and other demographic changes don’t influence house prices but the impact is limited without an associated increase in mortgage lending. 

Prices are set for entire streets and beyond by the last price paid for one house – a price agreed between a buyer (most probably a willing borrower), a seller and a willing lender. Few people would doubt that a rise in interest rates limits people’s ability to borrow thereby reducing house prices. Yet the material effect of borrowing costs on house prices isn’t widely understood. An abundance of credit steadily ratchets up prices. Valuations that would have seemed insane a few years ago now seem reasonable.  Other than an adequate increase in supply the only factor which can temper demand and limit ever increasing price rises is a restriction in the supply of credit. 

Rising prices are only possible if someone has access to money – either savings or money created through lending.  In our system of money when banks make loans they don’t go to a pot of carefully accrued savings, they create new money, quite literally, at the touch of a button. It is money printing. 97% of money consists of deposits created out of thin air by commercials banks. To enable a house purchase there is a limited cost to a bank.

In the absence of new construction, no new wealth is created.  We still have the same number of houses. Credit enabled price rises reallocate money in the form of ‘paper claims’ from one pocket to another while the actual, consumable, wealth remains the same. More claims for the property haves and less for the property have-nots, who are left facing ever higher rents and mortgage costs. Given that the City is also taking its cut is a high level of wealth inequality really such a surprise?

The effect on the young is particularly pernicious. A substantial levy will be taken from their future incomes and passed to the banks and others benefiting from rising house prices, largely the older generation. The Conservative’s help to buy programme, established under the guise of helping young people get on the housing ladder, is therefore dishonest.

For politicians, unable to structure economic growth yet believing it to be the means to gain and retain power, housing presents a powerful temptation. It is a conduit for large scale money printing which produces a sense of rising wealth and increased purchasing power for those who own houses. This creates a series of consumption driven knock on effects throughout the wider economy.  It is a policy pursued with zeal by both Labour and Conservative governments.  In this light, their claims to have the long-term interests of the economy at heart seem false.

We are told that interest rates are low to motivate investment in new ventures and grow the real economy. The reality is that house price inflation has ensued with an associated boost in consumption by all those with newly printed money in their pockets. 

The fundamental cause of the 2007 financial crisis was lending by the financial sector for property and consumption, rather than investment. Continued misallocation of credit into housing is more of the same. Extraordinary monetary policy measures – such as quantitative easing – are taken to fill the void which appears when reality rears its head and the bubble collapses. This exacerbates inequality and economic instability.

Hubris underlies the widespread belief that high house prices are an intractable consequence of the UK’s economic success. While high house prices have delivered a short-term boost to consumption and some economic growth it is paid for by the young. 

There is an astonishing lack of public debate about credit driven house prices and the consequences of such a large redistribution of wealth. Little attention is paid to the role of credit, a political and regulatory matter, yet it is at the root of the housing crisis. 

By Jason Leavey

Posted: 28th, November 2018 | In: Key Posts, Money | Comment


Everton and Liverpool United for Sean Cox

cox liverpool roma

Sean Cox

 

Nice one, Everton defender Seamus Coleman. He’s donated €5,000 (£4,300) donation to Sean Cox, his fellow Irishman. Mr Cox was attacked by Roma supporters before their Champions League semi-final against Liverpool at Anfield in April. Says Coleman:

“We have to be together. I think football is great for sticking together. Rivalries go out the window with stuff like that; you don’t see a crest or a jersey, you see a man who came to support his team and unfortunately it didn’t end too well for him that night.

“Thankfully there is a fundraising page and I don’t know the ins and outs of how he is but hopefully they can raise some money for him.

“I saw on social media the Liverpool manager had donated some money and saw there was a link to a GoFundMe page. I wanted to put my name to it because sometimes that raises more publicity. That’s what the Liverpool manager did.

“You think ‘Do you put your name towards it or not?’ because you might get people saying ‘He might have put more money in’ or whatever.

“It’s not about Liverpool and Everton, this is about a man who unfortunately was part of something he did not intend to be. I’ve had people in the street, Liverpool fans, stop me and say ‘Thanks very much’.”

You can go here to donate to Sean Cox.

Posted: 6th, November 2018 | In: Liverpool, Money, News, Sports | Comment


Chow Yun-fat has $714 million to give away

Chow_Yun_Fat_for_wiki money
Actor Chow Yun-fat lives on around $100 US dollars a month in Hong Kong. The rest he’s saving to leave to charity when he dies. That’s all $714 million of it. Chow’s reminds of me a conversation I heard at a wedding. One of the men arrived in a top of the range Rolls Royce. Another guest, a man of astronomical wealth, arrived in a small VW Polo. “Time’s hard?” asked the first man of the second. “No,” came the reply. “Things are booming. It’s why I no longer need a Rolls.”

The Shanghaist reports on the minted star of Crouching Tiger, Hidden Dragon:

Chow’s wife, Jasmine Tan, says that her husband manages to live so frugally in one of the world’s most expensive cities by frequenting street food stalls and rarely buying new things, according to an Oriental Daily report from last week. For example, for 17 years, Chow stuck with his trusty Nokia flip phone, only recently purchasing a new smartphone when his old device finally stopped working.

The 63-year-old Chow is often seen riding public transportation where he rocks a simple wardrobe — a shirt costing him 98 yuan ($14) and sandals costing another 15 yuan ($2). When asked why he likes to shop at discount shops despite his tremendous net worth, Chow replies, “I don’t wear clothes for other people. I just wear whatever I find comfortable.”

Chow Yun-fat, everyone, the most popular man in Hong Kong – which might explain why he doesn’t give his fortune away in his own lifetime…

Posted: 18th, October 2018 | In: Celebrities, Money | Comment


Ohio bar accepts food stamps for lap dances and drugs

This is a rather joyous affirmation of everything the right thinks is true about welfare more generally. That the amount people gain in welfare is vastly too high, that the rest of us are taxed at heinous rates so that the welfare queens can live in the lap of luxury without having to do a damn thing. That it might only be true at the margin doesn’t make it less true as a story:

Ohio bar loses alcohol licence after accepting food stamps for lap-dances – Undercover agents bought heroine, cocaine and lap-dances during 5-month investigation

Ah, no, that’s the well known reality curvature at The Independent which confuses strong independent women with a street drug that kills. Easy enough mistake to make, obviously.

An Ohio bar has been forced to shut down after authorities discovered they were allowing customers to buy drugs and lap dances using food stamps.

Allowing customers to buy drugs isn’t normally on the list of things a bar should do anyway:

Over nearly a half-year span, police say, undercover agents from the Ohio Investigative Unit were able use nearly US$2,500 worth of food stamps to buy dances and drugs, including heroin, fentanyl, cocaine and methamphetamines, from Sharkey’s, an adult entertainment lounge in a neighbourhood north of downtown.

And isn’t that cool? It took half a year of observing the naked ladies and consuming the booze ‘n’ drugs before it was possible to bring the investigation to an end?

But just to explain. In the American system instead of getting child tax credits and the like you get food stamps. This is a card, charged up with near money, which can only be used to buy food at certain stores. And what sort of food you can buy is pretty strictly controlled. They’re not like Green Shield stamps any more, the shop needs a special card reader.

So, the bar had to have the card reader. So it’s not just buying all these things, it’s buying them on a debit card, a special one that supposedly only works to buy food. They must have been properly set up to do this, not just some occasional possibility.

Making that 5 months to investigate rather interesting, no? I wonder how much the investigators had to pay their boss to get assigned to the case?

Posted: 25th, September 2018 | In: Money, News, Strange But True | Comment


Coca Cola cannabis and the volatile world of marijuana investing

Invest in cannabis? BNN Bloomberg says Coca Cola is looking at working with Canadian marijuana producer Aurora Cannabis to create drinks laced with marijuana. “Along with many others in the beverage industry, we are closely watching the growth of non-psychoactive cannabidiol as an ingredient in functional wellness beverages around the world,” said Coca-Cola in a statement. Unlike the cocaine Coca Cola used to put into its products, cannabidiol contains no psychoactive effect. But it can relieve pain.

It follows news that Constellation Brands (US-based producer of Corona beer and a raft of spirits and wines brands) is pumping lots of cash into Canada cannabis producer Canopy Growth.

 

Released in 1880, this is the very first publicly sold bottle of Coca-Cola. It contained around 3.5 grams of cocaine.

Released in 1880, this is the very first publicly sold bottle of Coca-Cola. It contained around 3.5 grams of cocaine.

 

Why Canada? In June this year, the Canadian government pretty much legalised the use of recreational cannabis. Weed should go legal in Canada on October 17, 2018. You’ve got to feel for Mexico, which should fully legalise the drug exported illegally into the US via cartels. The market is there for the taking. And the money is huge.

Yesterday, shares in Canadian marijuana cultivator, distributor and producer Tilray – the first weed company to IPO in the US – reached an intraday high of $300, closing up 38.1 per cent on the day. The surge was based on news that America’s drugs regulator would allow loss-making Tilray to export a cannabis-based medicine to the US. Tilray shares have soared by – get this – 1,288 per cent since the company floating on the Nasdaq stock exchange two months ago. At one point Tilray was a bigger stock than 59 percent of S&P 500. Not too shabby for what is essentially a farming company – even if it does look absurdly overpriced and highly volatile.

But here’s the thing: no-one can be certain what form a legal market in marijuana will take once prohibition ends. Why would a consumer pay a big corporate farmer for their hit when they grow it themselves? Weed isn’t like moonshine – you really can grow a decent crop in your airing cupboard. And if the market for products gets huge and varied – cheap supermarket own-brand weed drinks? – won’t the price for weed fall? Marijuana is just commodity that grows in the ground.

 

Posted: 20th, September 2018 | In: Money, News, The Consumer | Comment


Facebook users should sue over 1.3billion fake accounts

When you busy ad space on Facebook, be warned: robots are not brand loyal unless programmed to be so and they’ve got no cash. When Facebook’s chief executive noted in July 2017,  “As of this morning, the Facebook community is now officially two billion people! We’re making progress connecting the world, and now let’s bring the world closer together”, he omitted to mention the bit about 1.3billion on those accounts being fake.

That’s how many accounts Sheryl Sandberg, Facebook’s chief operating officer, told the Senate Intelligence Committee the social media giant had deleted between October 2017 and March 2018. You know that weird thing when your follower numbers went down? Well, you didn’t lose anything other than numbers.

What advertisers who believed the bogus numbers lost has yet to be calculated, but if you paid to reach, say, a million people, chances are you were charged 50% over the odds. Next time Facebook offers you the chance to pay $20 to reach 2,000 people in your area (your own followers!), ask them to prove the accounts are all genuine…

Posted: 10th, September 2018 | In: Money, Technology | Comment


The Archbishop Of Canterbury is wrong: higher taxes don’t make people happier

There was a time when to become the Archbishop of Canterbury one had to be a decent, if not good, religious philosopher. This clearly isn’t the case today as Justin Welby is a retired oil company executive among other things. And on current evidence not a good logician at all.

For he’s claiming that higher taxes will make us all happier. No, that’s really not the case at all:

Raising taxes will make people happier, the Archbishop of Canterbury has said at the launch of an IPPR report.

Speaking as the think-tank launched its report about finance and inequality on Wednesday, Archbishop Justin Welby said that prosperity was driven by wellbeing as well as income.

He suggested that higher taxes could fund the improvement of the environment and culture, which could improve overall happiness.

That’s an absolutely vital point being missed here.

The Archbishop of Canterbury has called for a fundamental rethink of how the economy works, including more public spending and higher taxes on technology giants and the wealthy.

In an interview with the BBC to mark the launch of a major report by the Commission on Economic Justice, of which he is a leading member, Archbishop Justin Welby said the present economy was “unjust”.

It is possible that a larger state will make us happier, that more government spending, more of the economy being disposed of by government, will make us happier. I think it’s unlikely, you might think it’s a great idea or not, but that’s not the same as saying that more tax will make us happier.

As it happens the taxation level is the highest, as a portion of the economy, that it has been for 49 years. If it were true that more taxes will make us happier you might think we’d have voted for them by now. But even that’s just an observation, not a failure of logic.

Taxes are, of course, the cost of gaining all those other lovely things. And we all prefer to have lower costs even while we’ll also argue for greater benefits. That’s why it’s always a shout for them over there to be taxed to pay for something nice for me over here, isn’t it? Further, we’ve even proof. Do all people pay all the taxes they should do because that makes them happier?

Err, no, there’s tax evasion and tax avoidance all over the place, isn’t there? Thus paying more tax doesn’t make us happier, does it? Given that at least some are willing to risk jail not to pay more tax we’d rather have to assume that more tax makes at least some people very unhappy indeed.

So, no, the Archbish fails basic logic, doesn’t he?

Posted: 8th, September 2018 | In: Money, News | Comment


Respected Manchester United Jose Mourinho gets a suspended jail sentence for greed

Just one more reason to admire and respect Manchester United manager José Mourinho: he’s earned one-year suspended sentence (two six-month prison sentences) in a long-running tax fraud case with the Spanish government. Spain’s El Mundo newspaper says Mourinho has been fined €2m.

The graceless manager stood accused of failing to pay over €3m in undeclared image rights earnings for 2011 and 2012. At the time he was manager of Real Madrid. Mourinho disputed the claim.

He won’t got to prison. Any sentence of under two years for a first offence can be served on probation.

But what does it mean for the all-important Manchester United brand? Tax evasion, especially when you’re stinking rich, is not a good sell. But then, United are all about the money so look out for The Brand finding an official ‘tax efficiency’ partner and a club tour of The Cayman Islands…

Posted: 4th, September 2018 | In: manchester united, Money, Sports | Comment


Pound Falls On Brexit Fears – The Solution Has Already Happened

It’s entirely possible to be concerned about Brexit, the costs and pains of leaving the European Union. I think anything is worth the joy of doing so but am aware that not all share that view. However, there’s less to worry about when the pound falls because everyone thinks that it’s going to be more terrible than we all thought it was yesterday. Because the pound falling is the very cure for it all being more terrible than we thought it was going to be yesterday.

Thus Mark Carney, Governor of the Bank of England, says that a Hard Brexit has become more likely. The pound falls – this is good, this is the correct reaction to, the solution to, a Hard Brexit becoming more likely:

Sterling dropped against the dollar in early Friday trading after Bank of England boss Mark Carney said he believes the chances of a no deal Brexit are “uncomfortably high” and warned the government needs to do all it can to avoid leaving the EU with no agreement in place.

Contained within that reaction to the news is the solution to the news:

The pound declined on the currency markets in the wake of Mr Carney’s comments, falling below the $1.30 mark, but had recovered by early afternoon.

Mr Carney said that if a no-deal Brexit were to happen, it would mean disruption to trade and economic activity, as well as higher prices for a period of time.

Well, yes, a Hard Brexit would make Britain’s trading position more difficult. The cure for that is a lower pound:

Sterling went as low as $1.2975, or down 0.3%, following the comments, while British government bond prices rose.

Britain would be forced to revert to trading under World Trade Organisation rules it fails to reach an agreement on the terms for its exit from with the EU in March 2019.

WTO rules would mean that British exports would face tariff barriers when exported into the EU. That makes it more difficult to export and presumably, prices having this sort of effect, mean that we’d export less.

So, what do we want to happen in such circumstances? We’d like some method of making our exports cheaper even though they face those tariff barriers. A decline in the value of the pound does that nicely, it makes our exports cheaper. That is, a fall in the value of the pound is the cure for a no deal Brexit and the imposition of WTO barriers to our exports. The cure is in the very reaction to the news.

It’s worth pointing out that the pound has fallen, since the referendum vote, by more than we would need to compensate for a no deal Brexit. The reaction to the possibility has already taken place.

Posted: 24th, August 2018 | In: Money, News, Politicians | Comment


Thank heavens we regulated Wonga into bankruptcy, right?

Or at least that we managed to regulate Wonga into near bankruptcy. For that’s what was done when we imposed limits upon the interest rates that they can charge. We set their business off into a declining spiral which brought them close to bankruptcy:

Britain’s biggest payday lender, Wonga, has received a £10m emergency cash injection from shareholders to save the company from going bust. The short-term loan firm said the development was a way of coping with a surge in claims from former customers seeking compensation.

The claims, said Wonga, related to loans taken out before 2014, when outrage over its payday lending offers prompted new rules to cap the cost of borrowing.

The thing is, lending small amounts of money to people for short periods of time is something expensive to do.

Leading technology venture capital funds Accel Partners and Balderton Capital have taken part in an emergency fundraising in the last few weeks, in news first reported by Sky News.

So, when we insist that people don’t charge enough to cover the costs of that expensive thing then they’re likely to go bust:

Wonga, which employs about 500 people, has been loss-making for the last few years after encountering a string of regulatory hurdles such as the City watchdog’s cap on the cost of short-term loans.

So, as it used to be. Company makes loans with high interest rates. It makes a profit and, obviously, the people taking out the loans were happy enough. Because they took out the loans.

This shocks people who practice GoodThink, that people will be charged that much in interest. So, the law is changed so that high interest rates cannot be charged. What happens next?

Wonga nearly goes bust and large numbers of people aren’t able to borrow the money they want to. Which is a problem, isn’t it? Because the people taking out the loans obviously believed that the high interest rates were worth it to them. It was other people, those GoodThink types, who stopped them. But the GoodThink types haven’t solved the problem of people needing small loans for short periods of time – that expensive thing to provide – they’ve just made it illegal to do so at a price which makes sense.

And yes, it really does work this way. This is the Federal Reserve (like the Bank of England, just in America) on the subject:

Even though payday loan fees seem competitive, many reformers have advocated price caps. The Center for Responsible Lending (CRL), a nonprofit created by a credit union and a staunch foe of payday lending, has recommended capping annual rates at 36 percent “to spring the (debt) trap.” The CRL is technically correct, but only because a 36 percent cap eliminates payday loans altogether. If payday lenders earn normal profits when they charge $15 per $100 per two weeks, as the evidence suggests, they must surely lose money at $1.38 per $100 (equivalent to a 36 percent APR.)

Cap the prices and you abolish the industry. But you’ve still not solved the problem of people needing the loans, have you?

Posted: 8th, August 2018 | In: Money, News | Comment


The high price of puking in an Uber

uber vomit

 

That stench inside the Uber mini-cab might be fart spray. And the vomit some passengers claim they are being charged lots of money to clean up might be a scam. The Miami Herald reports:

“I requested an Uber from Wynwood to the Edgewater area. At one point the driver told me a road was closed and that he could drop me off near my destination to avoid an extra charge. I agreed and got off,” Miami resident Andrea Pérez said about one trip last year.

But the next day Uber emailed her a bill with an additional $98 cleanup charge. It included a photo of vomit on the seat of the SUV she had used.

Real vomit? That fake vomit looks the business. And cleaning effort can be affected by the vomit’s constituent parts: milk sinks into the upholstery. In 2016, New Yorkers claimed they were being scammed by Uber drivers using fake vomit to charge high prices for cleaning their cars.

Says Andrea:

“I immediately contacted Uber through the app. I told them that I was alone, sober, that I was not carrying any drinks and that it was impossible for me to have caused that damage,” she said. “But every new email from Uber came from a different representative and always favored the driver.”

Get that puke down to forensics.

The upshot is that Uber refused to reimburse Andrea the cost. But her credit card company did get back her $98. Uber canceled her account. And the rest of us should take care: if your Uber puke is only on the car’ easy-wipe plastic parts and contains no hint of your kebab, cry foul.

Posted: 24th, July 2018 | In: Money, News | Comment