Culturalism · Personal Finance

How To Win At Economic Dating

If you’re more than a young whippersnapper, you probably remember the video I made on Prince Harry’s decision to wed Meghan Markle. It got about 60,000 views, and made a lot of folks angry.

Why? Because I called his decision an “impending disaster.” This was wholly unacceptable, for anyone detracting from his life choices was necessarily a hater in the eyes of my critics.

As it turns out, I was 100 percent correct. Harry the heroic helicopter pilot has been relegated to the status of a dutiful servant beneath his hard-charging and clever wife. Yes, I meant clever. The mistake of the outrage crowd is to assume a negative attitude towards Meghan, which was never the case. We should rather look to her as a model.

Stop and figure things for a second. At the time of their wedding, Markle was pushing forty and recently divorced. Her acting career had been moderately successful, but nothing to ensure long-term dominance in the entertainment industry. She stood to end up like a more ethical Lori Loughlin: famous, but hardly a star.

Nevertheless, she managed to wife up a younger prince with access to copious wealth, AND had a son with him. That’s pure talent.

The press frenzy over the royal couple’s “Megxit” chapter of stepping back from duties to live in Canada remains baseless controversy, as it’s all part of the plan. With legal and blood ties to the royal family, plus a newly-minted trademark brand, she has become financially invincible. Even Camilla Parker Bowels could never dream up such a fantasy.

How’s that for happily ever after?

Culturalism · Personal Finance

The Broken Male

I tend to avoid aimless social meandering, but sometimes an image rolls by that says everything without speaking a word. Let’s take a look:

What makes it odd? Well, this is a campaign promo pic, typically meant to showcase the warmth and nonthreatening Americanism embodied by the office-seeker. Instead, we have an unsmiling man forced into the process, perhaps to “keep the peace” at home.

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Maybe it’s a cheap shot, but does the tight-lipped Mr. Jayapal look even remotely happy? The expression signals passivity and resignation to the dominion of another person. He looks scared and restless, as if he wants nothing more than to escape the setting and play a few hours of Railroad Tycoon III, but only with the wife’s permission.

As you can see, his hands aren’t around the wife’s back, or clasping hers, suggesting a coldness or distance between them. Affectionate couples usually strive to showoff their union in public, particularly in politics. Case in point:

Trump firmly clasps his wife’s arms, and doesn’t lean away from her when posing. Whether you believe there relationship is sincere or not, it looks like one bathed in affection and admiration.

Mr. Jayapal on the other hand seems to be a prisoner of the sanctified institution known as marriage.

Personal Finance

Why I (Usually) Support Privatization

Sometimes being too realistic is a major problem. It’s easier to get lost in a swell of partisan tribalism than deal with the uncomfortable merits of a specific, emotionally-driven issue.

Consider privatization as an example. Somewhere in the 1970s and 80s, the Neoliberalism train launched, promising increased efficiencies to ward off the corrupt and stagnant government organizations of before. Assets got sold and regulations were rolled back, all in the name of a leaner administrative state with less bureaucracy.

Today, it is difficult to measure how effective these approaches have been. On the one hand, we pay less generous pensions to federal workers under FERS than its juicier parent, CSRS, while ensuring money is injected into the market with 401ks. We have passed these claimed benefits on through the explosion of government contracting, which allows federal authorities to pay for services without shelling out cash for the expansive benefits enjoyed by its own workers. In the case of the Postal Service, they are actually demanding further reforms to reduce the pension liability.

Has it eliminated waste? This is a harder one to gauge. Certainly the Iraq and Afghanistan wars showed us how well contractors manage taxpayer dollars, and the recent Accenture story about a  $297 million heartbreak is cause for skepticism. At bare minimum, there is no question that government spending has exploded since the neoliberal era, so the tremendous savings are questionable.

Finally, we might examine the bureaucracy issue. People like to point towards the DMV as a bad instance of government administration, but anyone who has worked in a large corporation or government contracting company knows they have massive bureaucratic tendencies. It is easier to fire a contractor than a federal employee however, so perhaps that side bolsters the efficiency argument.

So with spending up and job security down, why would anyone support the privatization practice?

To make money. I am well past having optimistic ideas of the government or private corporations, but the only immediate benefit of state-run bureaucracies is for those employed full-time by them. Otherwise, the return on taxpayer investment is minimal.

With a privatized  state entity, just like with a private company that bids for federal contracts, there is an opportunity to invest in shares and earn more.  Governments don’t do that outside of bonds, and those are the poor man’s arsenal.   

Culturalism · Personal Finance

While You Were Outraging…

Is any anger campaign organic?

It might seem like a silly question, as we already known that “going viral” is largely a planned and calculated event, designed by firms to generate followers and purchases. That’s old news. The real query relates to whether these “outrage activist” movements are not aligned with the same interests.

Think about it for a second: at the beginning of December, Peloton’s cute holiday mom ad began to generate substantial controversy for its depiction of a woman working out.

Fat activists were furious at the misogyny and sexism, because the husband is not shown working out, and his wife already happens to be slim. Those who thought the fury was silly probably pointed out that exercising is not just about losing weight, but also remaining healthy.

 Now, I will not pretend the Denny’s Division was not at some level legitimate; after all, we are well aware of the Trigglypuff saga.

But what was the broader objective? Let’s take a look at Peloton’s stock price right before this controversy blew up around December 2nd:

And now December 5th:

As you can see, Peloton suffers a nearly six-dollar drop over the course of a few days, the perfect opportunity for someone SHORTING the stock. In the event they chose to wait a bit longer, Peloton actually hit $27.00 per share on December 26th.

So, is Wall Street paying for SJW campaigns in order to rig speculative bets on stocks?

I’d lean yes, but no one is really paying attention.

Personal Finance

Is Buying a House Worth It?

“Buy a house, cause it’s an ASSET.”

You’ve probably heard this line before, perhaps from a baby who boomed. It sounds good, as rent can be expensive and just tosses money out the door to someone else. Who wants to do THAT?

In reality, home ownership less of a prize than your elderly benefactors (read: mortgage salesmen) will let out. While exceptions exist, a house is often a net financial loss due to misconceptions about what it entails.

To begin, we have entry expenditures. These will include the time investment of looking at potential homes, paying for inspections (home, radon, and chimney are just a few), and closing costs. Together this can run $4-5k, if not more.

Now, if you don’t put down 20 percent on the mortgage, you’ll have to deal with PMI, and should the bank say you don’t have to pay with them, it’s probably just fancy calculus. Your monthly expenses will include the loan principal, usually homeowners insurance, utilities, PMI, and interest.

“Yeah but you can DEDUCT your mortgage interest.”

Hehe, nice try. Due to changes enacted in the Tax Jobs and Cut Ass legislation signed by Trumpy, you have to itemize to receive the deduction, and in many cases the Standard Deduction will be a better deal. Key point here: the deduction is not a dollar-for-dollar benefit, so you can’t assume massive proceeds.

Then we have upkeep and repair. A house I recently looked at came back with so many problems it would have required about $70,000 in improvements to be worth what I initially offered. It was “AS IS,” of course. You either make those changes as a homeowner, or sell for far below what you want years later. Houses are like cars; they don’t usually age well with constant use.

To be fair, it’s possible to use the pass-through rules to save on taxes if you rent out rooms, and there might still be a tax credit for solar panels if that sounds desirable, so it’s not all bad.

But it isn’t the dream they talk about.

Personal Finance

A Warning On “No PMI” Mortgages

Home ownership is a tricky question that increasingly less young people are bothering to answer, but for those who take the leap, there are some pitfalls to lookout for.

Case in point: “No PMI” mortgages. To the fresh and eager, PMI stands for Private Mortgage Insurance, a wonderful charge applied to loans where the debtor puts a down payment of less than 20 percent on the overall price. It might not be a whole lot, but evading monthly expenses is usually a good thing.

Almost too good. As it turns out, lenders that will let you avoid that added cost are just trying to reel the line in. Sure, there is no PMI officially on the statement, but they will simply RAISE your rate offer to compensate.

For instance, say the prevailing interest rate for a conventional fixed loan of $200,000 is 3.75 percent. Normally, you would get a PMI of 0.5-1 percent, so between 83-166 dollars monthly.

Because the banker is a wonderful human bean, he will waive the PMI fee, whilst jacking up the mortgage rate to 4.75 percent.

Looking out for you

So yes, you do “save” by not paying PMI. They just take it out (with interest) and give a big smile.

It’s all about the numbers.