Category Archives: Government

Stuff you may or may not know about your local, state, and federal government

Culture, Finance, Government

Poor People Choose To Stay Poor

1 Comment

Poor people make poor choices. I suspect most of their poor choices are made because no one was or is there to help them make better choices. I believe that there needs to be help provided to instill common sense into their financial decision making. But as my MBA friend once said, “Common sense is not common”.

Here’s an example of what I mean.

I was watching TV and one of those “Make a low payment and own some piece of crap” commercial was on. The one that I’ll illustrate here was a woman saying “I bought a Playstation for my kids for only $15 a week!”. Let’s examine the STUPIDITY of buying from this lender to the poor.

I looked up on Amazon a Playstation 4 with some games and it’s $347.69. I also looked up the website, Flexshopper.com, that ran the TV ad.  It currently shows the SAME Playstation for $17 per week.

Now $17 dollars a week for a year is 52 payments which makes the total CASH outlay of $884!! That’s well North of double the price of the stupid toy.  If the woman just put aside that $17 every week she could buy the console in 20 weeks, just 5 months.  At the end of the year she’d have $544 extra dollars in her pocketbook.

Just for fun I did the calculations for $347.69 to figure out what interest rate a poor person is paying. It works out to annual rate of 226% !!!!

WTF?  226% is one heck of a return on investment for that predatory lender.  The best CD rate right now is 1.5%. Home loans are about 4%.  Used car loans are around 7%.  And they say used car salesmen are scum!  If we make an assumptions of 40% markup  to the cost of goods, $248.35 is the wholesale price for the $347.69 retail toy.  The actual annual rate of return is closer to 343%.  Not too bad in my book.  Can you say “Loan Shark”?  The “Easy Pay” sleazes are only one group of people that are financially RAPING the poor with predatory lending practices.

I’m a free market kind of guy and I’m not sure I would advocate legislating predatory lenders out of business.  But it does trouble me that there are people who are getting wealthy preying on the ill-informed.  I will say that Flexshopper is better than some other of these bottom feeders in that they do show in small type right below the payment amount, the total cost of the “loan”.  If someone chooses to buy from them, as Forrest Gump said, “Stupid is as stupid does”.  I looked up some other “easy payment” outfits that advertise heavily on TV, Rentacenter and Fingerhut, and it’s difficult to figure out their terms.  Rentacenter’s website makes you fill out an application before they’ll show the price which is total BS, in my opinion. Fingerhut buries the payment terms in their website.

What’s my solution?  There needs to be an educational focus on how to make wise financial decisions.  Sorry Hillary and Bernie but free college IS NOT the answer to the elimination of poverty,  There needs to be education to stop the financial enslavement of the poor.

Let’s play one more financial game.  Let’s say the young 25 year old mother took the EXTRA $544 a year and put it into an Individual Retirement Account, IRA, each year and worked until she was 70.  If the rate of return was 7% she would end up with $166,329 in her account.   If she didn’t buy the Playstation at all and put the full $884 per year into the IRA, she’d end up with over $270,000!!!  All of that money, well over a QUARTER MILLION DOLLAR$, can be hers for NOT making JUST ONE stupid purchase per year!

Why is there no outcry from EITHER PROGRESSIVES OR CONSERVATIVES to end this ENSLAVEMENT in poverty?

Business, Government

Hacking And Short Selling For Fun And Profit!

Leave a comment

Here’s an interesting video. It’s pretty boring and filled with techno mumbo jumbo, so you may not want to watch it all the way through, BUT the big takeaway is it shows a hack to remotely crash a St. Jude Medical pacemaker.

https://vimeo.com/180593205

Sheesh you MIGHT be able to kill someone by remote control. There is a BIG MAYBE that I discuss below.

Okay it took over over 3 hours to hack into the device. I suspect the time indicated was just run time to allow a brute force attack as it looked like an open loop attack (one-way from the hacking device to the pacemaker). It might have crashed the pacemaker in less than 3 hours. An attack could be executed while someone was sleeping, which would allow plenty of run time.

Now for the truth in lending part. It’s hard to tell if this is a real threat. The company that released the video is Muddy Waters LLC which makes money by taking down companies and SHORT SELLING their stock as it plummets. St. Jude Medical is in a $25 Billion acquisition deal by Abbott Laboratories which means lots of “gamblers” are betting on the stock. Stock prices generally rise during the speculation time of a big takeover. If you take a short position and the price tumbles after this inflationary jump in price, cha-ching, big buck$ are made. With a $25 Billion dollar deal, BILLION$$ can be made with a huge short position.  This sort “investment behavior” is why I ranted earlier that the SEC needs to stop short-selling-gambling. You can read my earlier rant here.

To get my political musings in, think about which presidential candidate is in bed with big Wall Street money.  Do you think she will call for trading reform?

Second truth in lending.  There may be a real concern about a hack.  The company, MedSec, published their research that the St. Jude Medical devices have security flaws.

Third truth in lending.  MedSec has a financial deal with Muddy Waters to license their research and to share in profits derived from their research.

What a convoluted arrangement of money shifting and back scratching!

This reminds me of the great junk bond days.  Ruin good companies and make money!  The gamblers just found a new way to play their game.

And we wonder why we don’t have good jobs in this country…

Government, Politics

What A Deal For The US Taxpayer!

Leave a comment

I just read today that the US State Department had signed a letter of intent to buy real estate in Nigeria. In the memorandum they were willing to pay the full asking price of $1250 per square meter.

Just out of curiosity I looked up some ocean view property in Malibu, CA. I can, without any negotiation, own a 2.19 acre ready to build  lot for a mere $6,900,000 (the asking price). For my money, I also get the plans to build a sweet Mediterranean style mansion with a view of Catalina Island.

To save you from busting out the calculators, my $7 million buckaroo purchase works out to $778 per square meter.

Wowzer! I would have never guessed that land in Nigeria is 60% more expensive than ocean view property in Malibu, CA!!!

Oh, one little extra special  tidbit. The land that the US State Department was looking to purchase is owned by a close friend of Billybob and Hillybob Clinton. Their good friend had generously given the Clinton Organized Crime Syndicate $5,000,000 big ones.

Of course the godfather and godmother will claim there was no influence or conflict of interest as the letter of intent was issued 23 day after the godmother left the office of Secretary of State.  Yeah, right.

BOHICA!!!