Daniel,
I recall in the 70's when dishonest elements would mail a business a box of
office supplies, unordered, COD. Businesses lept $100 in petty cash, so a
receptionist would shell out some nominal figure like $78.23 and put the box of
supplies in the storage with the ever growing stock. Eventually biz began to
protect themselves by having a policy of refusing all COD shipments. I recall
that change.
But those unscrupulous elements found out the COD part was unnecessary. They
could ship in the supplies, include an invoice, and the $78.23 invoice would get
paid... no accounts receivable clerk wanted to check to see if such a
transaction was legit.
So then with mail order becoming popular in the 1980's these bad elements began
sending goodies to peoples home, with an invoice enough homeowners paid to make
it a problem. Congress stepped in with a rule that if you did not order it, you
don't have to pay for it. That stopped that.
Undaunted, these bad guys went back to businesses, and no longer sent goods COD,
and no longer sent the goods at all. Given the new govt rules, they simply
mailed out invoices for $78.23 (or whatever) and the payables clerk lined them
up for payment rather than deal with researching the invoice. The crooks'
profits soared.
With the internet, no point in sending out bogus bills which often enough cause
people to pay the bogus bill, now the bad guys can simply take over your bank
account thru identity theft and do as they will.
Of course, if the govt was not involved in regulating transportation, banking
and communications, we would not have these problems. Security is now the
govt's job, and as any Iraqi can tell you, the US Govt is abysmal in this
regard.
With the govt in charge of security in transportation, banking and
communications, those industries simply leave it to the govt, because that is
the standard.
If the govt was not involved in transportation, banking and communications
regulation, then a proper amount of security would be a competitive item, and
quality in this regard would rise.
Most of the economic boom of the late 80's to the 2000 bust was due to easy
money, but the easy money ran into deregulated telecommunications (well,
deregulation lite)... if we were to decide collectively to deregulate anything
else, such a medicine (get govt out of medicine) or food or housing we'd see
another boom.
Freedom to pursue service to others, and freedom from interference in serving
others... therein lies the path to solving these problems.
John
All,
Beware of this latest technique of identity theft. It disguises as IRS tax
refund and as if it were from service@irs.gov. If you click on the claim form
link, then it will ask for your SS number plus your credit card information
complete with your ATM pin number. I think they are not smart enough to fool me.
Not only the amount is too small that made me lazy to fill out the form, but
also the link is not showing IRS web site, instead it goes to
www.essentialism.be, somewhere in Belgium (not listed in whois database). I
contacted IRS and they said there is no such refund for me.
Dan
To: daniel_purwadi@yahoo.com
Subject: Information - daniel_purwadi@yahoo.com - Tax return Code 854580473 -
From: "IRS.gov"
Date: Fri, 28 Jul 2006 18:37:56 +0000 (UTC)
Account : daniel_purwadi@yahoo.com
After the last annual calculations of your fiscal activity we have determined
that you are eligible to receive a tax refund of $63.80. Please submit the tax
refund request and allow us 3-5 days in orders to process it.
A refund can be delayed for a variety of reasons. For example submitting
invalid records of applying after the deadline.
To access the form for your tax fefund, please click here.
Regards,
Internal Revenue Service
Friday, July 28, 2006
Beware of this IRS email fraud
Wednesday, July 26, 2006
How the Real World Works, part 1
Folks,
The music industry provides for me a host of object lessons on how the world
works, which helps
me think thru problems I have by reflecting how the music industry handles such
a problem. The
more ideas we have on how things work, the more resources we have to
creatively address
problems. Here is something I wrote up after talking to mortgage bankers and
mortgage brokers.
I invite such people on the list to correct any errors, and further invite
everyone to lay out "how the
real world works" in their fields as well.. perhaps you have inside info on say
the auto industry, or
rock concerts, or academia... feel free to write something up for the benefit of
us all...
John
Mortgage Bankers vs. Mortgage Brokers
The government recently concluded hearings into the mortgage industry, and it
might be helpful to outline the issues being discussed.
First, there is a difference you must know. A mortgage banker is in the
business of lending money to homeowners and buyers. Most mortgage bankers have
"wholesale" and "retail" divisions. Mortgage brokers, on the other hand, retail
mortgage "products" they get wholesale from mortgage bankers. Both are
required by law to present the potential borrower with a "good faith estimate"
of
the loan and costs. A common misperception is a mortgage broker can get you a
better deal, since they are working off a wholesale basis. As you will see,
this is simply not the case, and where the abuses arise.
Washington Mutual is one of the largest retail mortgage bankers, and it is
also one of the largest wholesale (supporting brokers) mortgage bankers. They do
both. You cannot compare an offer from a Washington Mutual mortgage banker to
an offer from a mortgage broker, because Washington Mutual, wholesale
division will not allow a mortgage broker to use a wholesale offer to undercut a
retail offer. Most, if not all, banks have this policy and the means to enforce
it.
So if a broker says he can get you a better deal, because he can buy
wholesale, he is being disingenuous. He can get you a different deal, but never
the
same deal. And if you approach a broker first, he will steer you into the deal
that yields him the most money.
You can go to a broker first, and get a "good faith estimate" which will list
all of the fees the broker believes are necessary. The good faith estimate is
not required to list the rebates the banks pay the brokers for originating
loans. Say you want your broker to place your loan with bank A, and get you the
best deal. Bank A may have the best rates for you, but pays lower kickbacks
to the broker. Bank B may pay higher kickbacks, but charge you more interest.
The broker may be inclined to say Bank A is "uncompetitive" and Bank B is
better of you. Uncompetitive in this sense is from the point of view of the
broker.
Mortgage bankers advertise heavily, and a consumer may get a "good faith
estimate" from a banker first, and then shop around to compare the banker's
"good
faith estimate" to the broker's "good faith estimate". Watch for this: the
broker will never offer a lower cost on the same deal, and not because it cannot
be done so much as it is just not as profitable. The brokers, seeing the
bank's original "good faith estimate" they must "beat," will offer something
different, which appears initially to the consumer as better.
At this point, the consumer again fills out paperwork, and more, and begins
to tire of the process. Also there is often an urgency to the process having
to do with the real estate being supported by the transaction.
This is where it gets interesting, where the difference matters. Banks set
standards for the mortgage loans they will offer. Brokers evolved to help get
mortgages for people who do not fit the banks criteria. Such clients are
higher risk, and like any business, the higher the risk, the more the costs.
Creditworthiness problems, legal complications of any sort, verification issues
are
all handled expertly by brokers, for a fee. In fact, the more problems you
have, the happier a broker is, since it all adds up to the broker's benefit.
Mortgage bankers on the other hand, are paid strictly on the loan amount,
regardless of how easy or complex the mortgage turns out to be. (Full
disclosure: bank mortgage loan reps can win sales contests in which they are
awarded
such items as a TV or a shiney new bicycle; in no case do they get awards on any
particular loan). In fact, you may notice how a broker asks for as much
information about you as possible (the more problems to spot), whereas bankers
ask
for as little information as possible.
Everyone has problems, so both bankers and brokers have seen it all. Your
banker is expert in minimizing the problems, and making them go away as soon as
possible, especially since to a mortgage banker the problem is just another
headache, not more money. Your broker can make problems go away as well, but
makes extra money for the service.
Government hearings have been held on the brokers' practices. Brokers are
being unfairly challenged inasmuch as they do provide an important value. For
people who get turned down by bankers, brokers provide an important service,
but of course for a fee. Those fees reflect the complexity of the problem.
This is the heart of the complaints that resulted in goverment hearings.
But if you are not turned down by a banker, and you are not going get the
same deal for less from a broker, then you have no reason to work with a broker.
What you get from a broker in most instances is a different deal fraught with
fee opportunities that don't show up until the last minute, when everyone is
in a rush. You ought not complain if you take your business to a broker who
needs to charge extra for his services. If you asked Johnny Cochran to defend
you over a parking ticket, you can't be surprised if his fee is five thousand
dollars.
Another important point is the mortgage you get ought to be in relation to your
entire lifestyle,
and decided upon in concert with your CPA who can tell you how to best structure
your mortgage
to maximize the benefits to you as a self-employed person.
Tuesday, July 25, 2006
China Now Comes to USA for Cheap Labor?
Re: [spiers] Re: China Now Comes to USA for Cheap Labor?
On Tue, 25 Jul 2006 11:54:19 -0700 (PDT), M A Granich
:
>
> > ***Here is the part that I find hard to communicate.
> > The cock crows before the sun
> > rises, ... We do extremely little biz with such
> > producers.***
>
> #####If the labor cost for a pair of Nike shoes made
> in Indonisia is $1.20 and the same pair made in
> Portland OR have a labor cost of $7.20, would that not
> have an impact on where the shoe is made and what
> country you want to make Nike shoes? Why are high
> taxes different? A cost is a cost...right? How is it
> that Ireland's tax structure can make such a
> difference where labor costs can't?
>
> Anthony
>
> PS. Ireland doesn't have to support a huge military
> industrial complex.
***According to Nike managers who've attended my class, and conversations with
top Nike
executives... Nike neither makes nor sells anything. they merely design and
market.
Nike does not have within it's employee skillset the management talent to make
50 million
pairs of shoes a year. It outsources that management skill for the simple
reason it is far
cheaper than similar management in USA. They;ve tried a few times to do it
themselves, and
failed miserably each time.
New Balance touts their shoes as "Made in USA" when in fact they are sewn here
out of parts
from overseas. The expensive part of making shoes is to gather all the parts
from around the
world, logisitically keeping the flow to maintain production, and cutting and
allocating
portions of the materials to maximum efficiency. That can make or break a
company.
New Balance and Nike (and everyone else) outsources this critical step. Nike
also lets those
outsources sew the shoes together, New Balance elects to sew them in USA. It
does not make
a difference, because the savings is in management cost, and the small
difference in per shoe
labor costs, especially in relation to the retail, makes no difference.
It's the management that matters.
As to "Ireland doesn't have to support a huge military industrial complex."
well, neither does
the United States.
John
China Now Comes to USA for Cheap Labor?
Re: [spiers] Re: China Now Comes to USA for Cheap Labor?
> ***Here is the part that I find hard to communicate.
> The cock crows before the sun
> rises, but it has nothing to do with making the sun
> rise. Labor rates may in fact be
> cheaper, but it is not the reason for the trade. If
> you study the trade patterns, it is
> clear there is a negative correlation between cheap
> labor and trade. In 3rd world
> countries, where labor rates are low, in fact the
> component cost of labor is high, for
> say baskets. We do extremely little biz with such
> producers.***
#####If the labor cost for a pair of Nike shoes made
in Indonisia is $1.20 and the same pair made in
Portland OR have a labor cost of $7.20, would that not
have an impact on where the shoe is made and what
country you want to make Nike shoes? Why are high
taxes different? A cost is a cost...right? How is it
that Ireland's tax structure can make such a
difference where labor costs can't?
Anthony
PS. Ireland doesn't have to support a huge military
industrial complex.
When to start and quit
Re: [spiers] When to start and quit
Olivia,
It seems the US Education and media always assumes one wants to get the
economies of scale that high volume brings to business, and this is true when
one competes on price as in the case of WalMart.
But there is anbother basis on which to compete, and that is design. When
competing on design, exconomies of scale are irrelevant, and we do not work to
lower cost thru volume.
Whereas a "conservator' may get $5000 in orders in six months and seek to get
$10,000 in orders within another six months, ever gaining more volume, an
"innovator" seeks to gain say $5000 in orders in six months, then $5000 in 3
months, then $5000 in 6 weeks, $5000 in 3 weeks...ever increasing frequency.
Frequency is critical to remaining able to react quickly to market changes, and
not getting caught with too much of what once sold, and may not anymore.
John,
On your comment to last entry, please explain:
Y'all recall we work only on
frequency, never in volume at the small biz level.
Olivia
China Now Comes to USA for Cheap Labor?
Re: China Now Comes to USA for Cheap Labor?
--- In spiers@yahoogroups.com, "Pete Holt"
>
> Response to points:
> 1) Maybe the automakers will renege on their pension plans sometime in the
future. But they have those costs today. ... We were talking about costs
today.
*** Much of what happens today is based on calculations of what will be true 10
- 30
years from now... hence bonds quoted in those terms... where China is today was
decided by Deng Xiaoping's crew back in 1980. Where we are today in USA was set
in
motion by the Bush-Clinton-Bush team of the last 15 years.***
>
> 2) Yep, taxes in Europe are high. So what. ***
*** Ireland is criticized for not charging the same high taxes as the other EU
countries, causing eurobiz to HQ in Ireland; it is a sore point and matters very
much
in the cheme of things. HK outperforms USA pound for pound becuase their taxes
are lower.***
>
> 3) You say, "Little of what USA imports has a component cost of labor more
than
5%" My point exactly. Labor costs in 3rd. world countries is very low and this
makes a
difference in the costs of production and the final pricing of goods.
***Here is the part that I find hard to communicate. The cock crows before the
sun
rises, but it has nothing to do with making the sun rise. Labor rates may in
fact be
cheaper, but it is not the reason for the trade. If you study the trade
patterns, it is
clear there is a negative correlation between cheap labor and trade. In 3rd
world
countries, where labor rates are low, in fact the component cost of labor is
high, for
say baskets. We do extremely little biz with such producers.***
>
> 4) You say, "The history of heavy rail suggests otherwise... lighter and
lighter, rail
roads, auto roads, mag-lev could follow the same trajectory if govt was to get
out of
the road biz". But railroad and road (auto) technologies are very different.
Mag-lev
may have its place in the future as one means of propulsion for heavy (and maybe
light) rail, but not as a substitute for autos unless we fundamentally change
our
settlement patterns. And that kind of change would take many decades; and
require
a fundamental change in personal preferences from those of today. Not
impossible
in the long run, but not possible in the short run.
***Agreed, we'll not see mag lev personal in USA within the next 25 years. But
elsewhere, yes.***
>
> You are good at what you do well - international small business development,
but
you get out of your depth when your Austrian economic philosophy overwhelms your
common sense.
***You made this point before, but it has an internal contradiction. If I know
what I
am talking about in int'l small biz dev , and my analysis is "Austrian" how can
I be
doing well and be wrong? For me the free market philosophy both explained what
I
was seeing in the real world and guided me out of the dead -ends the other
philosophies entrapped. But I am open to arguments that explain a better
philosophical basis for int'l trade.***
John
Monday, July 24, 2006
WTO Troubles
Folks,
My home town of Seattle was the setting for the first revolt against the WTO,
and it seems it is dying,
which is a very good thing to see.
http://tinyurl.com/n8t6j
Freedom is the natural solution to any of the problems one might encounter in
trade, but the
Hamiltonians love their subsidies and regulations, something the rest of the
world is no longer
abiding.
I want to see USA #1 in world trade competition. We can't leave something this
important to the
politicians.
John