The 100 by 30 project

I've been throttled.

After years of being a Netflix member who rented what I'd estimate to be one DVD every two months, I recently started becoming a more active member. For the past three months or so, I'd been pushing my two-DVDs-at-a-time plan to the limit, probably cycling through 1.5 DVDs per week (my husband and I are catching up on the brilliant but not a little bit sexist "Rescue Me").

When I first started cranking out the rentals, I was astonished at how quickly they came. It was essentially a two-day turnaround: one day to get back to their facility, they shipped out my next flick that day, it arrived the day after.

After awhile, though, the pace slowed. It would take two or even three days to get a confirmation email that they'd received my returned disk, and the new one often wouldn't arrive the day after the email.

At first I thought I was imaging it. Had I just been misremembering the speed of my earlier rentals? But some poking around revealed that this slowing down is an intentional practice by Netflix that critics have labeled "throttling".  Essentially,  Netflix  bumps frequent users to the back of the queue when it helps them to more quickly service infrequent customers; because those infrequent customers cost Netflix very little but pay their monthly fees anyway, it's important to Netflix to keep them happy.

I actually don't have a problem with this. It's not entirely a clear line: I'd raise holy hell if someone tried to rearrange customers waiting in line at, say, Panera, and I was strongly opposed to the proposal to allow people to buy their way into faster TSA lines at the airport, but for some reason this doesn't disturb me at all. Although if the service gets even slower, I might just cancel.

OK, at least I'm no more of an a-hole than '60 Minutes'

Unsurprisingly, there was a piece on the real estate crisis on '60 Minutes' tonight. But I was interested to see an angle that I've always felt but rarely articulate because it makes me feel like I sound like a complete jerk. But here it is:

Why is it so tragic that so many people are losing their homes?

Certainly, it used to be tragic when someone lost a home. But why was that? The tragedy was that the family had been there for quite some time, and that they were losing their down-payment and the equity they'd built.

But if the people losing their homes are primarily recipients of no-downpayment mortgages on which they were never paying enough to actually pay off the loan (e.g. either interest only or ARMs they couldn't possibly afford once they reset): is losing their home tragic? While it's certainly a pain to have to move, they've likely spent a couple of years in a home paying far less than they would have had to pay rent on a comparable home. And if they pulled "equity" out of the home, they might have even made money on the whole experience.

And, you know, I'm not angry at these people. I'm really not. I think the banks are as much to blame. McMansions an hour's commute from work aren't really my bag, anyway.

But I certainly don't think it's tragic.

Things I wouldn't have known if not channel surfing between football games

Slimebag extradorinaire Kevin Trudeau -- author of Natural Cures "They" Don't Want You to Know About,  More Natural "Cures" Revealed: Previously Censored Brand Name Products That Cure Disease, and The Weight Loss Cure 'They' Don't Want You To Know About -- is now positioning himself as a personal finance guru with The Debt Cure 'They' Don't Want You To Know About which he's currently hawking via infomercial.

If you're going to take financial advice from an infomercial, it should only be this one.

Luxury in price only

I found this this article on luxury goods very interesting. It is a review of a book that claims that "luxury" goods (mostly clothing) no longer come with a level of quality, durability, and craftsmanship that is commensurate with their price tag. In other words, you really are buying it just for the label.

For some goods, this is clear to anyone -- obviously a designer T-shirt is not something that becomes a family heirloom. But being someone who never has and never will own a $3000 purse, I wouldn't have guessed that this might hold true in general.

At my particular price point, there still is a clear correlation between price and quality. The difference in craftsmanship between a pair of pants from Old Navy and one from J. Crew is significant. For some of my goods, the durability actually increases a price decreases, but that's due to the cheaper synthetic material being hardier, e.g. my pleather Nine West purse has survived things in years of daily use that would have stained or deconditioned real leather.

Help end universal default

In March, U.S. Representative Mark Udall (CO) introduced H.R. 1461 which would, among other things, eliminate universal default. It's currently in the House Financial Services Committee, whose member list is below. If you see your representative, give them a call!

       

Chairman Barney Frank, MA
Rep. Paul E. Kanjorski,           PA
          Rep. Maxine Waters, CA
          Rep. Carolyn B. Maloney,           NY
          Rep. Luis V. Gutierrez,           IL
          Rep. Nydia M. Velázquez,           NY
          Rep. Melvin L. Watt, NC
          Rep. Gary L. Ackerman,           NY
          Rep. Julia Carson, IN
          Rep. Brad Sherman, CA
          Rep. Gregory W. Meeks, NY
          Rep. Dennis Moore, KS
          Rep. Michael E. Capuano,           MA
          Rep. Rubén Hinojosa,           TX
          Rep. William Lacy Clay, MO
          Rep. Carolyn McCarthy,           NY
          Rep. Joe Baca, CA
          Rep. Stephen F. Lynch, MA
          Rep. Brad Miller, NC
          Rep. David Scott, GA
          Rep. Al Green, TX
          Rep. Emanuel Cleaver, MO
          Rep. Melissa L. Bean, IL
          Rep. Gwen Moore, WI
          Rep. Lincoln Davis,           TN
          Rep. Albio Sires, NJ
          Rep. Paul W. Hodes, NH
          Rep. Keith Ellison, MN
          Rep. Ron Klein, FL
          Rep. Tim Mahoney, FL
          Rep. Charles Wilson,           OH
          Rep. Ed Perlmutter, CO
          Rep. Christopher S. Murphy,           CT
          Rep. Joe Donnelly, IN
          Rep. Robert Wexler, (FL)
          Rep. Jim Marshall, GA
          Rep. Dan Boren, OK

Republican Members

Rep. Spencer Bachus, AL
Rep. Richard H. Baker, LA
Rep. Deborah Pryce, OH
Rep. Michael N. Castle, DE
Rep. Peter King, NY
Rep. Edward R. Royce, CA
Rep. Frank D. Lucas, OK
          Rep. Ron Paul, TX
          Rep. Paul E. Gillmor, OH
          Rep. Steven C. LaTourette,           OH
          Rep. Donald A. Manzullo, IL
          Rep. Walter B. Jones , NC
          Rep. Judy Biggert, IL
          Rep. Christopher Shays, CT
          Rep. Gary G. Miller,           CA
          Rep. Shelley Moore Capito, WV
          Rep. Tom Feeney, FL
          Rep. Jeb Hensarling,           TX
          Rep. Scott Garrett, NJ
          Rep. Ginny Brown-Waite,           FL
          Rep. J. Gresham Barrett,           SC
          Rep. Jim Gerlach, PA
          Rep. Stevan Pearce, NM
          Rep. Randy Neugebauer, TX
          Rep. Tom Price, GA
          Rep. Geoff Davis, KY
          Rep. Patrick T. McHenry, NC
          Rep. John Campbell, CA
          Rep. Adam Putnam, FL
          Rep. Michele Bachmann, MN
          Rep. Peter J. Roskam, IL

        Rep. Kenny Marchant, TX

 
      

        

 

The Apocalypse Mutual Fund: How can we make money off of global warming?

This month's Atlantic has a great story:  Global Warming: Who Loses—and Who Wins? That link is subscribers only so I'm assuming most people can't read it, but the story is primarily about global warming not just from an ecological but also a financial perspective. What cities will become barren and uninhabitable (his vote: Phoenix)? What currently undesirable regions will become temperate paradises (Siberia)?

He claims that, ecological and probability of great-great-grandchildren affording potable water aside, Greenlanders celebrate the melting of glaciers there because it means their property values are increasing.

So why shouldn't all the people who acknowledge global warming take advantage of this? Create the "Apocalypse Fund", and let the obstinate ones get left behind financially. Sure, it's crass and opportunistic, but hell, it's happening anyway and I want to make sure my great-great-grandchildren can afford potable water when it's $100/gallon.

Great post on information asymmetry

The "Freakonomics" blog has a great post on information asymmetry and commodities:

Those aren’t typos. Walgreens charges $117 for a bottle of the same pills for which Costco charges $12.

I was skeptical at first. Why on earth, I asked Wolf, would anyone in his right mind fill his generic prescription at Walgreen’s instead of Costco?

His answer: if a retiree is used to filling his prescriptions at Walgreens, that’s where he fills his prescriptions — and he assumes that the price of a generic drug (or, perhaps, any drug) is pretty much the same at any pharmacy. Talk about information asymmetry; talk about price discrimination.

It's funny. Awhile ago my employer sent out a brochure on ways to save them money on heath care. Some were obvious -- "please don't make frivolous doctor's appointments!"  Some were laughable -- "If you buy analgesics over the counter, it saves us money!" Yes, me paying for a product that I have prescription insurance for would save my insurer money.

However, one thing I might be willing to do, within reason, is shop at whatever pharmacy charges my insurer the least. But I don't want to assume that the retailer with the cheapest out-of-pocket cost also charges insurers the least, too.

Pb with your PB&J

On the heels of the announcement that Bush is planning to use a recess appointment to make the chief lobbyist for National Association of Manufacturers the chair of the Consumer Product Safety Commission comes this story about the CPSC finding lead levels in children's lunch boxes that were high enough to alarm the FDA, yet the CPSC spun it as "no instances of hazardous levels." Yummm.

I guess the good news here is that the CPSC doesn't have much room to fall anyway?

Prepaid-Tuition Program in Texas Faces Long-Term $3.3-Billion Deficit

"The plan has been closed to new enrollees since 2003, after rapidly rising tuition rates at state colleges made it impossible for the board that oversees the program to set prices for new contracts. Other states also have considered altering or permanently closing their plans because of long-term deficits."

This has always been my big fear with wrt pre-paid tuition programs. I was curious whether it was
FDIC-insured, and discovered this:

The 75th Texas Legislative Session passed HJR 8, which was taken to the voters of Texas on November 4, 1997. The constitutional amendment passed creating a constitutionally protected trust fund backed by the full faith and credit of the State of Texas. Future tuition and fee payments are guaranteed by the State.

So it seems that investors are safe, but taxpayers are not. How did the fund manage to fall so far behind?

The program was launched with much fanfare in 1996. But it was closed to newcomers in the summer of 2003 after the Legislature deregulated tuition at state colleges and universities to help cope with a $10 billion revenue shortfall that year.

Deregulation triggered a record surge in tuition rates, which have jumped more than 40 percent over the last four years at the state's 35 senior colleges and universities.

The deregulation law allowed college governing boards to set their own tuition levels for the first time, rather than having to adhere to statewide rates set by the Legislature.

Fascinating.

Reason #7420 I'm glad I don't like/need make-up

Especially now that we're preparing to try to conceive:

Via The Consumerist, a report on all the foulness in cosmetics. Since my facial moisturizer falls into the "lowest concern" category at skin deep, I'm not too worried.