I have seen the future of payments and it is now….

Feeling old.  Went to grab something for dinner at a Wegman’s that I was driving by (their ready to heat up offerings are some of my favorites).  I like the setup because you can grab what you want and jump in an express checkout and be out of the store is a matter of minutes.

I was the slowpoke.  The checkout line had several likeminded shoppers in front of me and a couple behind me – all with a handful of items and all using their phones for a quick pay feature.  The barely had to slow down through the line (except for the old guy who had to swipe a card).  I didn’t even have time to be embarrassed.

Outside, I noticed that a couple of my fast shopping colleagues got into waiting cars – they didn’t even have to park! So I have a prediction: drive through pre order pick up phone pay dinners.  I know that some chain restaurants will deliver your take-out to a waiting car, but I see the fast lane crowd ordering from their car from a set menu, arriving at an appointed hour, paying with their phone without taking the car out of gear. And most important feeling really proud of the accomplishment. Bet on it

Cognitive Capture –the latest rage

Always slow on the uptake, I never thought to create a narrative to explain why all these public figures resort to narratives. I believed, in my simplistic fog, that they were merely intellectually lazy.  How silly of me! Now it is all over the blogosphere and bloviatosphere.

The experts now tell us that intellectual blindness can now be measured by neuroscience techniques as cognitive capture. That is why they just shout and talk across other people and waste all out time.  Now that we can explain it and measure it, don’t yo feel better?

Medical marijuana and risk management

We will soon have medical marijuana availability in our state and probably all states. I should be content with this thrust at libertarian pragmatism with a nod to recent medical science.  But part of me protests. There are potential risks that are seldom mentioned, with all the cultural noise. We know that half the adult population is pro marijuana under any circumstances, and about a third are strongly opposed. I simply have two questions:

Does anyone have any science concerning the combination of low and high doses of marijuana in combination with prescription meds, or alcohol, or other substances?  It would be nice if the advocate groups would follow up legalization with some (voluntary and anonymous) research so shared experiences can be scientifically analyzed in case there is a risk. The research could include secondary cannabis smoke for good measure.

Do we know how to define and measure DUI or impairment with cannabis?  It is all very nice to have people get the benefit of marijuana until we consider the risks of driving a vehicle or operating machinery.  The opponents of medical marijuana could perhaps direct their efforts constructively toward improving the measurement and the calculation of impairment to save accidents.

If there is a third risk, it would be unintended use or overdose.  We think about teenagers (just lock the stuff up) but more serious perhaps is food.  It appears that in many states the consumption of cannabis snacks and goodies is growing faster than other forms.  Getting the strength right on the labeling might be a role for (cough cough) the government regulators.

Dear Internet Trolls

I apologize if this is not appropriate for you, but the internet is loaded with people who bend the use of communications for their own purposes. At the least harmful are those who just want to chat or ‘social network’ and the most malevolent are those who are ‘spoofing’ or ‘phishing’ for the purpose of fraud or personal profit.

I do not chat.  I do not tweet. I do not need more communication or any sort. I enjoy the chance to offer products or services on the internet for the terms offered, and really appreciate a simple clean response. If you have other uses for my message take your activity to those websites that promulgate that sort of thing.  Leave the straight people’s internet alone!

(cut and paste this message when you get phishing emails)

Another reason for skepticism about financial advisors

As if you do not need another reason since most financial advisors underperformed the stock market(s) last year by quite a bit, and they still collected their fees.

In the news from the Labor Department is that after fighting with the industry for a long time they are pushing forward on something called the ‘fiduciary duty rule’.  I do not know what is worse, that the rule is necessary or that the industry is fighting both the rule and any publicity.  Here’s why:

Financial advisors for families or individuals planning their investments and particularly retirement have an opportunity to earn fees from the investment funds they steer their clients towards.  This was, back in the day, called kickbacks. In many business activities it is flat out illegal.  For independent financial advisors it has not only been common practice, but seldom revealed to the customer.

In the grand scheme of outrage, there are many financial activities which are probably worse (think about how congressmen do their investing) but the scale and scope of financial advisory services which exploit the ignorance of savers has the potential to be the biggest of all.

In the era of index funds, and transparent advisory services at the funds it is time to wake up the public.  No wonder ‘they’ are trying to keep it as quiet as possible.

 http://www.cbsnews.com/news/labor-department-tighten-restrictions-financial-advisors/

Farmers could be natural economists

A farmer in North American regularly delivers his grain to an elevator or processor and often chooses to have the dealer store his grain for a fee, for example 20 cents per bushel for delivery in May. The situation for example in November offers a spot sale of $2.00 per bushel with a potential range of $3.00 to $4.00 when and if prices rise in the spring. The farmer has gotten rid of his operational risks of handling and storage and has taken on market risk which he can hedge (and they do) or leverage (and they do) with or without the help of advisors. If he does not need the cash there is no credit risk and transaction costs are all known. Farmers have been doing this for decades with a portion of their harvests.

Intuitively they also understand negative interest rates on funds or bonds. No need to explain to them the risks they have assumed in exchange for the safety of their basis. They have a tranche of their (crop) portfolio purely subject to market risk and opportunity. The original asset remains secure. If, as anticipated, the seasonality of corn prices rises towards the historical mean, they can profit nicely depending on the structure of their financial arrangement, but their basis is known and their carrying cost are known. Since there is a long tradition of paying a fee for someone to hold their assets, they are relaxed about the transaction, and can sleep at night.

Why all the angst about negative interest rates? There is little difference between paying Sweden and paying a grain dealer to hold and secure an asset.  But politicians and governments and geopolitics begin to get involved with bond markets, raising (IMHOP) unnecessary questions about an environment of very low or negative interest rates. Many elements of economics do change in extended low rate environment. There are also potential structural changes coming after several years of low rates, combined with a liquidity trap.

But I would argue that the anxiety or nervousness in the investing public is being generated by the salesmen of market services.  Their performance last year was terrible.  Investments into bonds at negative interest rates is a rejection of their sales pitch – that managed selectivity outperforms markets. Perhaps they should leave their overpriced funds and go into farming.

Excessive Vocal Fry is Our Enemy

I confess to be near a Howard Beale moment. The number of people you meet face to face , but mostly on the media (and all over the radio) who have adapted and adopted vocal fry as their chosen speaking affectation seems to grow exponentially every week. Last night there was a wonderful television interview with a Supreme Court Justice, but the youthful interviewer was drowning in her own vocal fry so badly that I switched channels.

Vocal fry is a very purposeful speech affectation where the speaker imitates having gravel stick in their throat and growls their words almost unintelligibly.  Think Clint Eastwood at his worst, but with the younger generation it appears that they growl for the sake of growling….and you just don’t understand A WORD.

Some popular singers have always had a rough singing style, but this is not stylistic…it is pure affectation and it is increasingly done without nuance, and really not very well.  Some describe vocal fry as an epidemic among young females, as if the younger generation needs another way to not be understood.

I intend to walk away…to tune out….to turn off when vocal fry abounds.  Even NPR, probably the worst offender, can take its hyphenated vocal fry broadcasters and throw them in the Potomac.  I will settle for reading transcripts of the Ruth Baden Ginsberg interview. She speaks clearly and without affectation.

February warnings for gardeners – the DON’Ts

The late February weather is always terrible – and gardeners are always (whether they admit it or not) tending towards seasonal affective disorder (that’s why they spend a fortune to go to the Flower Show).  The seed catalogs arrived and the planting juices started to flow so you cannot resist.  The comments below reflect many of the mistakes I have made over the years and hope you do not.

First; recognize that in most cases it is too early.  Sure, greens and cold weather crops can and probably should be started in stages if you can keep an eye on them.  I prefer keeping the nutrients at a minimum so the young shoots do not get too spindly even on greens. But realize that warm weather vegetables need degree days of sunlight that are almost impossible to replicate without spending a fortune.

Second PAY ATTENTION TO YOUR TRAYS as often as you can.  Plant ‘em and leave ‘em is a recipe for disaster with early seeding since so many things can go wrong.

Number three:  Try to avoid artificial heating or over heating unless you will have nonstop vigilance.  Putting trays on radiators is a really bad idea – they will dehydrate almost every time.  Using heat tapes intended for pipes is both expensive and spotty, and purchasing heating pads intended for greenhouse is probably the most expensive thing you can do (I bought one and the electricity went out the next week).  Above all, do not try to use an old electric blanket or human heating pad for your seedlings.  If you do, check your fire insurance first.

Number four, if you began your mission indoors, consider building a cold frame against the sunny side of your house.  There is a lot of tradition (and guides) to cold frames, and my grandmother showed us all that if you pay attention you can get a great and proper early start.

Beware of temperature extremes.  Very cold nighttime lows and bursts of warm days are a threat to your tender shoots. Covering, including garden cloth can help both.  If you build a cold frame, be prepared to prop it open as the sun gets stronger. (and wall ‘o water costs too much)

Six….move your plants a lot.  As the sun gets higher in the sky it will be more intense and you should pay attention. The cold weather crops will suffer if they get too hot.

Finallly, pay attention to soil temperature when you plant….just because the daytime high temperatures are in the sixties does not mean that the subsoil is ready.  Yes…you can sacrifice a household thermometer to do the test.  Each crop has its own minimum required temp to avoid stunting. Oh, and don’t forget that the deer, unless checked, will love your new additions to their diets.

I have to confess, that the rushing of planting (before St Patrick’s Day) is all but out of my chore list.  I have a few greens, and I will always cheat on peas, but generally I believe that the degree days of April more than catch up to early planting so you should wait.  But I know you won’t.

Not feeling charitable

We got through Christmas, with that lovely commercial giving spirit, and Valentine’s Day where happy gift givers certainly sincerely expressed their love, and now half the world can celebrate Chinese New Year, where the giving of little envelopes filled with cash continues around the world.

Pardon me if I read all the other stuff.  The Camden charity whose president went missing with the money.  The published list of the worst charities in the country (http://www.tampabay.com/americas-worst-charities/ ) who took in millions and spent pennies on direct aid to their causes.

Now we read about the ‘ice water challenge’ which is just sitting on most ($90+ million) of the money  without purpose just because they can. Pardon me if I think we are all being had.

The weather is cold.  Donate your charitable time and effort to shut in neighbors, or a hospital volunteer organization, or the little league. (apologies to Bill and Melinda Gates) Keep your money.  It is bound and destined for the sharks.

A challenge for repair mechanics in the frigid weather

I drive a three year old 1/2 ton pickup truck and when the weather gets this cold my visibility is 50% impaired.  Every time I look in the rear view mirror there is just a large white blur through the open rear window blocking everything.  Do any of you with mechanical experience have a solution?

Ask the experts about regulation

Please don’t ask someone like me about regulation.  The real experts have made an industry choice to promote their services by offering free resources for readers. Some law firms (alpha order):

              Davis Polk and Wardwell

              Morrison Foerster

              Shearman and Sterling

The large accounting firms invested in apps, and infographics, and all manner of technology:

              Deloitte has a handy interface

              E&Y has a research center

KPMG established and institute

PWC has built an app

There are many consulting firms large and small, who publish (again for promotional purposes) brilliant analysis and charts and graphs…all are of interest.  There remain, however, a finite number of hours in the day.  What I am having trouble finding are efforts to solve regulatory fragmentation, or recent movements towards regulatory consolidation.  If you find some please let me know.

Remembering the not-very-romantic origins of celebrating Valentine’s Day

So the weather continues to be gray and icy; and it must generate cynicism.  Now we see that beyond the overpriced flowers and under loaded boxes of candies (yes, Virginia florists and candy sellers shift their prices and quality in February) we now see advertisements for $100 stuffed animals.  Just in time for the debate on what to do with the money saved from lower gas prices.

The more that Hallmark protests that they did not start Valentine’s Day celebrations, the harder it is to believe them. We have to set aside our recollection of the Simpson’s ‘Love Day’ episode and realize that the holiday has been around for a long time (research the Roman celebration of the feast of Lupercalia) but we can blame the commercialization on Hallmark et al.

From an economic perspective, there is more benefit from Chinese New Year because the spending and saving is real, than the transfers of imported flowers at high margins. In the US we don’t openly discuss prostitution, but the British newspapers are annually loaded with stories from ‘sexperts’ on how business is best for them. And of course the suicide hot lines have the highest volume of calls.

I was once rather close to a florist – they hate Valentine’s Day because it brings out the worst customers.  Same for restaurants.  Maybe the bartenders do well and happily due to cynicism, but these sure smacks of a festival to eliminate from our calendars.

Thus we have a holiday artificially hyped which results in general grumpiness if not harm. Brilliant.

Are we all falling victim to Goodhardt’s Law?

“When a measure becomes a target, it ceases to be a good measure.”– Charles Goodhart

A bit of troubling retrospection -- we have all been setting goals for a long time, and many of them are measurement based. Personal satisfaction, balance, and even sustainability are the sorts of targets we should strive to attain; but as I review documents for companies, institutions, and individuals; Measures—performance measures more than anything else, dominate. Not IMHOP a formula for long term success.

The gray days of February

I have come to believe that the weather at this time of year affects everyone. Particularly on weekends some are depressed or just stay in bed. Some are even surlier than their normal selves.  Those of us who enjoy the sunshine are just a bit lost.  We know six weeks from now (March 20) our spirits will not be as low.

The greenhouse is frozen.  The snowfall did not melt off the roof and there is no sunshine to warm the interior, which often heats up to t-shirt temperatures in the winter. The firewood set for splitting is frozen, so that half the exercise is getting ready for exercise.  The latch on the toolbox is frozen, so the heroic attempt to get a head start on spring repairs is stymied. All standing water buckets are rock solid, and I have to go out and chop a hole for the horse to drink. Even filling a pipe with loose tobacco is a chore in the wind.

Refusing to succumb to the psychologically obvious is the mission of the day.  No depression, or angst, or poor humor.  Force it. Walk the dog….but don’t let him slip or splay out on the ice. Crank up the fire.  Crank up the music.  Mull some cider. Scroll through the humor sections of the magazines. Take a nap and ignore the blue clouds emanating from Zeke…….two weeks to go……

Sensible management of adult indulgences

I will be at the back of the line of those to criticize the catalog of common adult leisure behaviors that accompany, well, being an adult in America.  We drink alcohol, we engage in personally risky behaviors from smoking to fast driving, we augment or enhance or lives with drugs legal and not always legal, and everyone salts their speech with phrases which would have shocked our grandparents. So be it.

By the way, the academics have always called these behaviors ‘volitional disorders’ and I have come to believe that they are not disorders but they are very much controllable to a certain degree.

But behavior in excess has a very high price.  The DUI count continues to mount (whether or not the arrests increase) as alleged adults are still certain they can drive impaired. The geniuses who are busted are now often doing hard time.  This makes no sense to me since there are always people who would DD in a pinch.  Personally, I found myself without a DD over a year ago, so I just go home early (safer to drink at home) and Zeke is the only one who has to put up with me.

 The unemployment statistics rarely include calculations of people unable to work anywhere because they cannot pass the hair follicle test. The careers that do not advance because men or women have clearly made lifestyle choices which trickles into their daily work patterns. Sadly, this now includes chronic chain smokers, who (not unlike parents without babysitters) disrupt everyone else’s work patterns with their own personal needs. Drugs include prescription meds in many cases, where the effect is disruptive for those around the chronic user.

The key factor in these adult pleasures or requirements (note no reference for kids, even older kids) is the notion of control.  There seem to be no discussions of moderation, or sensible balancing of levels of use, or even reengineering of the indulgences themselves.  I would have thought with the legalization of weed some brilliant agro-engineer would have developed a three hour high so you could drive home safely after your 47^th grateful dead revival concert. Or beer and wine with a short term effect.  Just dreaming.

I guess I will have to be two faced -- continuing to support adult indulgences (better than having even more neurotic people) and still trying to take away car keys.

Stop picking on the crunchies – they know not what they have done

The crunchy moms (mostly California based) who have assumed an extreme approach to a natural lifestyle, and are quite vocal about their views, have come under a lot of scrutiny and attack by those who interpret their behaviors as risky and socially irresponsible. Extreme views, anti-science positions, pseudoscience, counterculture behaviors are all fair game because they are extreme and strident. 

Haven’t we lived among the Amish and the Jehovah Witness groups for decades?  They are not strident and imposing on us.  The crunchies are strident and have been for a while. They essentially banned smoking, rightly or wrongly, from every indoor and outdoor location imaginable. But many of their views on environment and libertarianism are usually supported by main stream thinking.  Not a reliance on herd immunity. Not the immunization issue.

But imagine you have a family member with a birth defect that all the experts cannot explain. You would grasp for every explanation large and small.  You might even embrace conspiracy theories. It would be difficult to do nothing. I believe that the origin of the strident crunchie views is a sad paranoia relating to things that cannot (yet) be explained – things that had a profound emotional event in their lives. I also believe that no manner of ridicule or teasing or scorn will change their minds. Don’t pick on them.  Isolate them, but make sure they wash their hands.

Ignoring short term market movements is a great idea for 2015

Three facts to remind ourselves whenever decisions are to be made about the market (all markets).

1. People and firms whose job it is to trade make much more profit during volatile times
2. The operators of the markets (traders) and their computers have enormous influence if not control over markets (on margin) as they generate massive volumes (without exaggeration).
3. Individual entrants into markets and trading are at an enormous tactical disadvantage.

A lot of commentary surrounded the (brilliant) promotion of Michael Lewis’ articles and books last year, and whether you agree with his observations (as observations not facts) there are clearly issues with the structure of markets for everything traded from commodities and equities to art and collectibles. For 2014 we should also note that most of the hedge funds whose specialized in selective ‘styles’ underperformed not only their own goals, but the markets in general. The trading divisions of the large firms, for many reasons, also performed poorly even without the specter of regulation costs for the future. It was not a good year, probably due to lack of volatility.

This is 2015, and the markets, I believe all markets, have become highly volatile even on a daily basis. We cannot see the details, early on, concerning the performance of ‘those who do markets for a living’ because they are opaque at best and maddeningly complex to research, but it is not a stretch to assume they are doing very well thus far.

If you have to use 2015 markets for your own purposes I have no positive advice. Be very skeptical and find someone who is a professional who you trust…..or take a conservative index fund type path. The way these financial environments work, we will only know what is going on in 2015 in a couple of years, but be very cautious.

Relative vs. Nominal Statements

Trying to sort out just why so many are so wrong – commentators, headlines, even personal discussions. Not just ignorant, or under informed, or stuck in a narrative, just simply wrong. No Facts, or evidence, or (horrors) deep discussion can dissuade them.  There must be identifiable root causes, and those of us who are forever optimistic reckon that if we identify why, then there can be change.

Starting with simple information deficit as a premise, I ruled that out. Even if we have any manner of attention deficit disorder, there is so much information at our fingertips that cannot be the problem.  Then came speculation as a root cause – but those who speculate are speculators, not fundamentally wrong.  We wish they would have better structure to their speculation, but they are easily identified. So I was convinced that it was a basic lack of understanding of logic – ‘correlation is not causality’—serves to explain a great deal of the wrongheadedness out there.  Time and time again there is a lot of confusion when observed results are not results at all.  But even this framework comes up short.

A formative time for me was a job I had in the 1970’s looking at what populations ate in countries all around the world, and measuring quantities and prices for economic comparisons. The first part of the task was the name of the food, and there I realized that different humans call the same foods by different names and in different frameworks.  Identifying the relative facts was the key, for if you stayed with the nominal observation you could get it wrong almost every time.

Todays wrongheaded focus on the nominal (and conflate correlation and causality) all the time. They fall victim to their favorite narratives without exploring the relative information and comparisons. Of course today’s headlines include the moronic approach to vaccination avoidance. For your example, think about food handlers.  I will avoid a blanket accusation of sociopathy for anyone suggesting avoiding vaccination, but the relative context is the nail in their logical coffin. It is not acceptable to allow anyone to simply observe the nominal and get away with it. They should be challenged overtly and loudly.

My generation suffered the benefit of listening to Henny Youngman

Promoting a website

I would like to once again put in a promotional word for www.mindyourowndamnbusiness.com . Why oh why is everyone else’s activities such an obsession for so many, when personal matters are personal and probably very private? Maybe we need some busybody exorcism.