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Comment Re:HAHAHAHA! (Score 2) 216 216

Look up your state department of insurance (if you're in the US). Personal auto insurance is heavily regulated. When they establish premiums, insurance companies have to provide loss triangles, expense info and more, in detail, to the state DOI. There are teams of actuaries that put these filings together. The DOI has their own actuaries that carefully examine this data and check for a number of things including, but not limited to:
1. Is the insurance company charging enough to remain solvent in both likely and catastrophe scenarios?
2. Is the insurance company treating people fairly?
3. Is the insurance company making conservative underwriting profits?

Trust me, many many rate filings are rejected by the insurance departments. So much so that many insurance companies target a 4% underwriting profit. Yes, 4%. Compare that to software operating margins that can run around 40-50%.

Were the industry not heavily regulated you might have a point. The states seem to do a pretty decent job making sure that auto insurers don't take advantage of the fact that auto insurance is (typically) mandatory.

Comment Re:It's not a dodge. (Score 1) 161 161

Read this article linked to from the article in the summary:
http://crosscut.com/2014/08/wh...

It indicates that Microsoft's dodge very likely was illegal. State law at the time indicated that royalty taxes should be paid where your operations reside - not where you book the income. This was never pursued by the state department of revenue. Why? The author notes that the WA dept of revenue was run by a former Microsoft exec. Whether that's really the reason we don't really know, but it certainly is enough to arouse suspicions (and make me want to request some emails from the State gov).

The law was then changed so that the dodge would be explicitly legal (by another former Microsoft exec in the state legislature). Also written into the law was an amnesty provisions for any corporations who likely owed back taxes under the old version of the law. I wonder why the amnesty portion was so important? What corporations could have been flaunting the old version of the law?

Comment Re:A long time coming... (Score 1) 364 364

The Fed "printed" more money via QE (weak assets from banks), but it also took a huge volume of money out of the economy. Check out the new reserve requirements on all the big banks. They got a bunch of cash in lieu of weak assets, but that cash didn't go anywhere. It's still sitting, under bank control, invested in highly secure, long-term assets (as required by...The Fed). Money that used to be loaned out and used several more times throughout the economy is now sitting in long-term assets. It's not moving through the economy.

In the end, I think it's safe to say that the net effect of all that "extra" money is a lot less than you thought - as borne out by the current international value of the dollar.

Comment Re:Why is a robot different from any other machine (Score 1) 342 342

I think stories like this are gaining traction because:
1) People see a robot as a relatively new, advanced, and expensive technology and
2) People feel that relatively new, advanced, and expensive technologies should be built in such a way so that these types of things don't happen

How much extra $ would it have taken to install a set of sensors that would make sure the robot wouldn't perform if a human was in the way? Relative to the cost of the robot, probably not all that much. At least, that's probably what people are thinking. Whether they're right, I can't say. Still, it isn't an unreasonable thought.

They don't think this about old or inexpensive tech because they are familiar with the dangers and/or realize it isn't necessary cost-effective to change it. For example, a kitchen knife that wouldn't cut a person, but was still very effective at kitchen tasks probably would be cost prohibitive.

Comment Pneumatic bug launcher for the win! (Score 4, Interesting) 117 117

First of all - where do I pick up one of these guns:
"To test these materials in the lab, researchers developed a pneumatic launcher to fire living bugs at a sample coating. They first used crickets as ammunition, but a physicist colleague urged them to switch to fruit flies, which would be more representative of what planes hit during takeoff and landing."

Second - I hope they develop a clear coating as I would like it on my motorcycle visor.

Comment Re:A Catch-22 (Score 1) 940 940

I definitely agree with this. Whenever there is talk of it, however, it's quickly killed as it's quite unpopular. Mortgage interest is the thing that takes many people from the world of the standard deduction to the (lower tax) world of the scheduled deduction. I think that they might be able to do away with the deduction if they were to implement a corresponding lower overall tax rate. That would lower taxes for renters while slightly increasing taxes on those with mortgages.

Comment A Catch-22 (Score 4, Informative) 940 940

I'll note that, for years, I worked on developing new financial products sold to mortgage lenders (post crisis). I've spent a fair amount of time studying trends in US housing prices. I'm not well versed on other countries so my comments are US-centric. I've left this VERY high level, but wanted to note a few concepts and why they answers aren't super easy.

There are a few fundamental flaws in the mortgage system today. The first is that banks generally don't lend their own money (almost all mortgage money in the market comes through government sponsored entities like Fannie Mae, Freddie Mac, or Ginnie Mae). Well technically, it is their money, but realistically, the loans are purchased so quickly by the GSEs that it might as well not be their money. On top of this, the banks receive money from the GSEs for every loan they sell on to the GSEs. In short, the banks are incentivized to make loans.

Second, both the government and the the Federal Reserve seem to want a higher rate of home ownership by Americans. The Fed helps encourage this by keeping rates low (and buying huge amounts of mortgage backed securities from the GSEs). The GSEs encourage it by making loans more accessible (lower down payments, lower credit scores, higher debt-to-income ratios, etc.). The banks like this strategy because it allows them to make lots of new home loans (so they make lots of money with almost no risk) and every time rates drop they get to process lots of refinances (so they make lots of money with almost no risk). It's all good right? I mean, the banks are making lots of money.

Here's the problem: When money is easily available it creates more potential home buyers. When money is cheaper, it increases what people can afford (your $2000 per month payment now covers a 400k loan instead of a 350k loan). This is still good though right? More home for the same money?

Well, more people with more money means that demand for homes increases and, with it, home prices. Khan academy had an amazing set of videos that illustrated the home price bubble, but I can't find them. In summary, the number of homes available for purchase compared to the number of people has remained relatively constant since the 40's - even when adjusted for growth areas (things balance out in the growth areas over time). Home prices, however, have increased dramatically - especially as a percentage of total income. When did this star happening? When money became more accessible. Still good though right!?! I mean, now existing homeowners can sell their homes at a huge profit and people can get into those homes.

Ah, but there's a catch. While average income (inflation adjusted) has remained level and even trended down, home prices have sky rocketed. Eventually, even with low interest loans available, house prices reach a level where purchasing them puts people out of an acceptable debt-to-income ratio. Home prices can't go up to the point where people are spending more than 70% of their income on housing (as an example - this isn't a benchmark number or anything). Things hit a point where new buyers aren't buying anymore. That starts a chain reaction that leads to the bursting of the housing price bubble.

One way to fix this would be to make money harder to get and more expensive to get. It would have an initial downward push on prices, that would eventually level out. It would also stop the major price inflation. Why? Let's say we require a 10% down payment. Suddenly, a bunch of potential buyers are shut out of the market. Home prices stagnate. The responsible buyers (and those who advance in their career) eventually save up the 10% and can get into the market. They're actually able to save the 10% now because the house prices are stagnant and 10% is no longer a moving number. In the mid 2000', house prices were going up faster than people could save. Prices inflate, but the barrier to entry keeps them from going on a roller coaster. Banks, however, hate this because they lose out on all that sweet income from loaning out GSE money.

All is well now right? Well, no. Not at all. You've now successfully locked a bunch of buyers out of home ownership because a bunch won't ever save that 10%. Some people are just too constrained by the circumstances to save that amount. This is compounded by the fact that when you lock people out of home ownership you lock them into renting. In the short term, this drives demand for rentals (like today when so many feel locked out of the ownership market) and results in dramatic increases in rent. How do you save for a down payment when your rent keeps increasing 10% every 6 months? Some people can. Many can't.

So, what do you do? It isn't an easy answer. That's why those who see the whole picture have such a difficult time seeing the way out. I know many will simply say - get the government out of mortgages. That might work in the long term, but would have immediate catastrophic effects on home prices. That home is the primary equity many people have. When one removes a huge chunk of the value in that savings vehicle one creates a big burden on the government for retirees and the like.

Submission + - Rand Paul wraps up NSA "filibuster" after 10 hours->

mpicpp writes: After standing on the Senate floor for more than 10 hours in protest of the National Security Agency's sweeping surveillance programs, Sen. Rand Paul, R-Kentucky, wrapped up his so-called "filibuster" just after Midnight on Thursday morning.

NSA illegal spying and data collection of innocent Americans must end. Thank you all for standing with me. #StandwithRand

— Dr. Rand Paul (@RandPaul) May 21, 2015
The senator and 2016 presidential candidate staged the talkathon ahead of the Senate's consideration of legislation to extend the NSA's authority to collect phone records in bulk. The controversial surveillance program — which has been deemed illegal by one federal court — is supposedly authorized by Section 215 of the Patriot Act. That section of the law is set to expire on June 1, giving Congress little time to renew it.

Paul started his "filibuster" against an extension of the Patriot Act on Wednesday afternoon, even though the Senate was actually in the middle of debate time on an entirely different issue — trade authority. Paul's efforts likely slowed down Senate business — lawmakers are trying to finish a few important bills before taking off for a weeklong recess — but the Senate is still expected to take up legislation to deal with the expiring NSA program.

Link to Original Source

Comment Re:jessh (Score 1) 397 397

We are now a service economy - not a manufacturing economy. Most people can do their work from home almost as well (and sometimes better) than they can do it at the office. Heck, our largest office is in Boston and it's closed today. Just about everyone is online and productive. Take into account the expense and danger associated with keeping cities open during significant natural events and it seems like a simple decision.

Comment Re:Splits the community in half (Score 1) 823 823

Ha - I was just making a bad Fast and Furious joke.

As someone who has heavily modified a few Japanese cars, I'm well aware of what "ricers" are capable. There is a great Top Gear episode where the crew take 3 super cars to the drag strip in Vegas. They get schooled in the quarter by a bunch of modified cars. It's fun to watch.

Comment The one mistake investors keep making (Score 1) 386 386

This reads like the bible for the short-term investor. As an (admittedly small time) investor, I want to put money into a company that makes solid profits with its current goods/services while pushing the envelope for the future. Be on the bleeding edge. Push boundaries. Create new markets. Fail often, kill your failures, and learn. Don't stagnate in your current market; waiting to be dethroned by competition.

Something like a driverless car could revolutionize transportation and all of the industries which rely upon it. Being on the forefront of that could spell enormous profits (not to mention entirely new industries).

Sadly, it seems the current investor is only interested in what a company has done this quarter. That results in companies that are so bent on shaving costs on their current products/services that they completely miss the thing that makes them obsolete. This is one of the reasons Buffett always argued against splitting Berkshire stock. He wasn't interested in collecting investors who couldn't commit to the long-term. Interestingly, Berkshire started as a textile manufacturer. That isn't to say they are on the bleeding edge, but they do represent a company that is willing to look for and invest in something new and different.

Comment Re:Fine (Score 1) 293 293

It's a fair point, but not completely analogous. Given the competition that exists in the hotel space one can almost certainly find a hotel that does not try to block your hotspot. Of course I would pick that hotel over one that does block my hotspot. If I could find a theater that allowed me to bring my own food and beverages I would certainly pick it over others. I don't know of any of these (at least in my area).

To answer your question, though, I will go to the theater now and then to watch a movie, but I don't purchase the food. I generally avoid the theater for several reasons such as:
1. Major improvements in home theater have allowed me to get a satisfactory viewing experience at home (for the vast majority of content).
2. Convenience (food, bathroom, pausing, lack of annoying people texting around me, the ability to text without annoying others, etc).
3. Cost.

So, are my principles iron clad? No. Are they sound to the point I feel like expressing my opinion on the matter? I think so.

Never appeal to a man's "better nature." He may not have one. Invoking his self-interest gives you more leverage. -- Lazarus Long

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