🎭 Theatre Writeups, 🛣️ Highway Updates, 📰 Musings on the News, and other 🗯️ Rants and Roadkill Along the Information Superhighway
I wonder what the effect of this ruling will be on those gas station pumps that ask for your zip code:
California merchants may not ask customers who pay with credit cards for their ZIP codes, the California Supreme Court decided unanimously Thursday.
In a case closely watched by retailers, the state high court said ZIP codes were “personal identification information,” which a state law bars businesses from demanding of customers.
Normally, I wait to do a lunchtime news chum until I can find three or more articles I can tie together with a theme. But today I’ve got a bunch of groupatwos (h/t Kenneth Kay) for your enjoyment:
USA Today has an article about how paid tax preparers are going to have to demonstrate certain competancy standards to get a preparer ID number and submit returns. It notes that those who are not CPAs, lawyers or IRS-enrolled agents will have to pass a competency test and meet annual continuing-education requirements. As usual, what gets me are the comments.
When you read them, you see an intense hatred of the IRS (justified) and of CPAs (not justified). Now, I’m an oddity. I’ve always used a CPA to prepare my tax return. Perhaps that’s because my mom was a CPA (one of the first women CPAs in California), and my dad was a PA and EA, and my father-in-law was a CPA. I’ve always seen the advantages of using one. They help with tax planning; they keep abreast of all the nuances of the law to that I can (a) stay legal and (b) not pay more than I need to pay. I know there are those that prefer to do it on their own or via Quicken/TurboTax—to each their own. We prefer to use a CPA.
So reading the comments irks me. CPAs are professionals. Most are sole-practitioners or work at small firms. These are the small businessmen and business women that help the community and provide a fair amount of employment. What is it about society today that makes people have antipathy towards the educated professional, be it the accountant, doctor, lawyer, or engineer?
Today I received another exhortation from a financial institution with which I am associated to switch to online statements. They make the following claims regarding their online statements:
“With Financial Instituion Online Statements, you don’t have to worry about missing a payment — we’ll send you an email letting you know your statement is ready. Paperless statements are:
Easier — keep your statements organized at your fingertips with 24/7 access
Greener — save paper by printing only what you need
More secure — reduce your risk of mail fraud
Online Statements make it easy to manage your account. Switch to free online-only statements today.”
I’ve always been hesitant to go to online-only statements. Perhaps it is because I still send paper checks, and I match the statement to the check. I do this because I find it easier: I print out all my checks from Quicken, and take a small amount of time to pay them, filing the paper receipts as a record. Online bill paying, I think, is simply easier for the bank. Unless they have a specialized interface for Quicken, you need to coordinate with each providers website, as well as your bank website… plus they typically charge you a fee for online bill paying. So I’ll stick with paper checks, thank you very much.
But online statements… I can’t see them emailing you the statement itself, for there’s too much of a security risk there, unless they send you encrypted PDF (or you have coordinated signed encrypted email – ha!). So they will just send you a note indicating the statement is ready, so you need to take time to go to their website, print it (to get the portion to mail in). The “free” aspect is thus a red herring–it is perhaps no charge, but it certainly isn’t free. It just transfers the time cost and the paper cost to your end. As for keeping the statements organized–I’ve never found financial institution websites so well laid out that they are easier to use than a good paper filing system, especially for things multiple years old. Are they giving enhanced search capabilities? Can I go to their web site and ask (via a query): I want to see all my charges to a florest made three years ago that were around $40? As for the risk of mail fraud, I’m not sure whether this is FUD. True, mail does go missing (I’ve had some theatre mail appear to be undelivered), but it is more likely the fault of the mail carrier than intentional fraud. But I’ve also had email go missing silently.
So what is the real advantage here? What am I missing? I know there are folks out there that love electronic statements and bill paying? Why?
Today’s news chum all has to do with money and coins, in one way or another:
USA Today has an article on how the administration is soliciting ideas on how to reform the financial markets, especially Fannie and Freddie. The article includes the following quote:
The role of Fannie and Freddie in the mortgage crisis is hotly debated in Washington. Republicans say the two companies, with the government’s encouragement, deserve most of the blame for inflating the housing bubble.
They argue that the two companies promoted homeownership to people who ultimately couldn’t afford it, and were required to do so by the Department of Housing and Urban Development, which required the companies to devote a portion of their business to affordable housing.
But Democrats say Wall Street players were the primary culprits behind shady lending practices that led to the mortgage bust. They argue that a lack of national lending standards allowed shady players to make irresponsible home loans.
I think this shows that neither party truly understand what created the financial meltdown: the simple notion in banks and investment companies that greed is good, and personal greed is better.
Yesterday on the plane, I listened to a number of podcasts. Act One of this week’s This American Life had an excellent piece on this very subject. Here’s the description: A hedge fund named Magnetar comes up with an elaborate plan to make money. It sponsors the creation of complicated and ultimately toxic financial securities… while at the same time betting against the very securities it helped create. Planet Money’s Alex Blumberg teams up with two investigative reporters from ProPublica, Jake Bernstein and Jesse Eisinger, to tell the story. Jake and Jesse pored through thousands of pages of documents and interviewed dozens of Wall Street Insiders. We bring you the result: a tale of intrigue and questionable behavior, which parallels quite closely the plot of a Mel Brooks musical.
Hint: The musical isn’t young Frankenstein. They summarized the caper in this song.
The interesting part of the story was not only what Magnatar did (basically, they encouraged the creation of CDOs that would fail, in order that the insurance (credit default swaps) would pay off), but that big banks were major investors in these securities that they knew were risky. Why did they do this? Because the bank made major fees for handling the transactions, and the fees were divided amongst the principals as bonuses. When the CDO finally failed, it wasn’t those individuals left holding the bag.
A really interesting program. You really should listen to it.
ETA: Here’s an article on a similar scheme by Goldman Sachs from the NYT… and here’s even more detail.
In early March, the Los Angeles Times did a nice piece on the lost of artwork from the former Home Savings of America buildings, which was cited in today’s Lost LA column. It’s an interesting article (and I urge you to read it), but I want to highlight one quote that struck me:
National banks, masters of derivative finance, do not care about our homes, our savings or our nation beyond their potential to generate management bonuses.
Think about this when you decide where to place your money: A big national institution, or a local credit union. Which one is more likely to care about your community? Or, as Alton Brown once put it in a different context:
Here’s what it comes down to kids. Ronald McDonald doesn’t give a damn about you. Neither does that little minx Wendy or any of the other icons of drivethroughdom. And you know what, they’re not supposed to. They’re businesses doing what businesses do. They don’t love you. They are not going to laugh with you on your birthdays, or hold you when you’re sick and sad. They won’t be with you when you graduate, when your children are born or when you die. You will be with you and your family and friends will be with you. And, if you’re any kind of human being, you will be there for them. And you know what, you and your family and friends are supposed to provide you with nourishment too. That’s right folks, feeding someone is an act of caring. We will always be fed best by those that care, be it ourselves or the aforementioned friends and family.
We are fat and sick and dying because we have handed a basic, fundamental and intimate function of life over to corporations. We choose to value our nourishment so little that we entrust it to strangers. We hand our lives over to big companies and then drag them to court when the deal goes bad. This is insanity.
Our financial system is in poor shape because we entrusted it to people who care more about making money for themselves first, and their shareholder second, than improving the communities in which they exist. Our politics are in poor shape because we have been electing people who put their political party first, and what is right for this country and all the inhabitants of this country (as opposed to just their contributors) first.
Many of my Facebook friends play Farmville. I don’t, but others do. Ever wonder how much money they make off of you? This LA Times article gives an estimate. Here’s some data:
So, do the math: Suppose that that each person who plays a social game generates, on average, a penny a day. Multiply that penny by the number of days in a year, 365, and then by the number of people who play the game daily… and voila: $113 million a year. So add some programmers, and there’s still a tidy profit. Think about that the next time you play.
Of course, you could be like me an just order from Amazon. Those of you, like me, in California: We may need to keep our eyes open. The California Legislature wants Amazon to pay sales tax.
[P.S.: To my Facebook friends who are also on LJ: I did a friend-only post earlier today regarding a situation I would like opinions on. You need to be on a particular filter to read it, but you most likely are (if you are on LJ), so I would welcome your opinion. If you are not on LiveJournal (LJ), create an account. It’s free, and after you create it you can friend me (cahwyguy) and see my occasional friends-only posts that don’t make it to FB. If you are not familiar with LiveJournal, it is a journaling/blogging platform with much better privacy controls than Facebook.]
