All Wet

So, Wet Seal is closing all it’s stores. Going out of business.

Every time I’ve ever set foot in one of those stores, I have been treated as though I am invisible. Now, I realize that I am not exactly Seventeen, but it seems to me that if employees had treated people in their stores like potential customers, they might not be looking at unemployment.

Karma, neh?

Creative Accounting, or GO REBELS!

So Jeff Skilling got a new sentence handed down for his role in the financial shenanigans at Enron. Actually, it’s a reduction of the sentence he was given back in 2006 for stuff that happened throughout the 90s and caused the company’s collapse in 2004. In case you’ve forgotten:

Enron’s collapse put more than 5,000 people out of work, wiped out more than $2 billion in employee pensions and rendered worthless $60 billion in Enron stock. Its aftershocks were felt across the city and the U.S. energy industry.

That’s over and above defrauding local power companies and gouging “Grandma Millie.”

For years, Enron was able to make people think things were much better than they were. They were able to make people believe they were making money.

Which brings me to this item from ThinkProgress:

America’s colleges and universities used more than $2 billion in student fees — an average of more than $500 per student — to subsidize rapidly growing university athletic budgets, as Ohio University professor Richard Vedder wrote at BloombergView today. Those fees can top $1,000 a year at some schools, and as Vedder writes, reliance on them ends up making college more expensive for students and often places the burden on the poorest students. And most of the time, students don’t even know they’re paying the fees.

In addition to student fees, athletic programs are relying more on money from general university budgets, so taxpayers are also spending millions of dollars a year to cover shortfalls as athletic budgets continue to grow faster than academic budgets.

Now, I have long thought that the accepted wisdom of “sports brings in money and students so we have to fund it” was flawed. If sports are really profitable, why are students and taxpayers paying so much money to support them? I have suspected that the “accounting” used to make sports profitable would have made Jeff Skilling drool. How did they pay for the stadium? It would never have been built without wealthy donors who like having their names on buildings. What about the maintenance for that stadium? Oh, that’s a different budget. What about the scholarships for athletes? Another budget. The coaches? Oh, they’re faculty so that’s yet another budget. Security, ticket sales, advertising the big game? Three different budgets. So most of the expenses of a good athletic program are offloaded onto other areas, leaving only the juicy profits and the bragging rights.

The idea that the money for sports is — really, truly — being paid for by students rips back the curtain on the Great Oz. In an age where the cost of college is rising much faster than either inflation or the wages they can expect to earn, where a student loan crisis is on the horizon, how can any college justify these costs?

No wonder so many young adults don’t know how to handle money. Where would they have learned?

In case you didn’t get the title, University of Nevada Las Vegas’s sports teams are the Rebels. Enjoy this unintentionally hilarious radio ad. 

In Closing: a few items on the NSA, FBI, and the government spying on us including a petition you can sign; some stuff on food, obesity, additives, and whatnot; about time somebody used some freaking common sense; assorted nonsense about the latest attempt to make abortion so hard to get that it might as well be illegal; and corporate America running amok or returning from insanity.

A Few Words about Taxes and the IRS

Forbidden Fruit. Apple has been getting grilled for following the law in a manner that reduces their taxes. Frankly, most of us choose to do legal things to minimize our tax liability. Give a charitable donation? Buy a house with a mortgage? You could be guilty of following the law! I’m with the CEO of Google and Bill Gates on this one: Don’t like it? Change the law!

The Scandal That Wasn’t: So thanks to Karoli of Crooks and Liars for actually digging up some facts to go with our conspiracy theory witch hunt on the IRS allegedly investigating too many conservative groups. When roughly 80% of applicants are conservative groups, you should be shocked if roughly 80% of those investigated aren’t conservative groups! But hey, let’s not let reality get in the way of a good rant.

That’s it for now.

In Closing: a small example of manmade climate change; cats at sea; so that’s why; supply and demand; an interesting man; inequality; duh; they deserve better; dumb idea; about time; even handed reporting on immigration reform; family leavecrack babies; and I hardly consider it “freak” when something crashes into it.

I’m sure it seemed like a good idea at the time

USA Today tells us that thanks to patient surveys, hospitals are kissing our butts:

Special air-blowing vests keep patients warm pre-surgery. Private rooms are the norm. Staffers regularly check in with patients to anticipate their toilet and showering needs to cut down on call-light usage. Patients are given clear discharge instructions. Cleaning is no longer done at night. Patients are taught the difference between “pain-free” and “pain-controlled.”

[snip!]

Amenities such as free lattes and valet parking are not new to hospitals. They began offering them years ago in a high-stakes fight to lure patients. However, what hospitals are doing now is, for the most part, tailored to the survey questions they know patients will be asked.

[snip!]

“The problem is America is a free-market economy,” [Rajesh Balkrishnan of the University of Michigan] said. “We need to give patients a way to speak on what they think about health care, what works for them, how health care professionals work for them, because those factors go into determining whether treatments are successful.”

I don’t think any of us have a problem with the idea that they are trying to make a hospital stay a more pleasant experience. It’s hard to recover from whatever when there is too much noise to rest, for example. It’s great that staff is making a better effort at explaining what’s going to happen. Anticipating needs? Well that is mighty fine customer service. However, I think now we are starting to go too far.

For one thing, who the heck is paying for these valets, lattes, and pre-surgery warming vests? In the end, you and I are through higher premiums and taxes. Could we perhaps make do with a clean blankie and a coffee maker?

Second, all this nonsense loses sight of Reality. In Reality, people choose a hospital based on two factors and only two factors: What hospital will my insurance company pay for? or What hospital is closest to the site of the accident? The overwhelming majority of people don’t have the luxury of saying “General Hospital has a better record of surgical outcomes” or “St. Elsewhere has free espresso drinks!” Let’s stop pretending that any of this is considered by Joe and Jane Average when Joe’s having chest pain.

Speaking of Reality, I understand that Obamacare means more insured patients means more demand for physician services. But where exactly does Stacy think she’s going to find doctors for that medical office space she’s trying to rent out?

In Closing: it would be nice if reporters would actually read scientific studies before telling us what they say; light up crosswalks; they had to get water from somewhere; college readiness may be more than academic skills; some taxes are going up regardless of what gets decided about the fiscal cliff (at this point I’m mighty tempted to say let’s just go there and watch the backpedaling); OBEY; and the ultimate helicopter parents.

Oh Boo Hoo

Fortune Magazine tells us that “For banks, it’s getting harder and harder to earn a buck.” That’s because interest rates are so low. Or at least that’s what “conventional wisdom” would tell us. Please cry for the banks and demand higher interest rates!

Not so fast. If banks are having such a hard time making an “honest” buck, then how come “U.S. bank earnings rose 21% in the April-June quarter and lending to consumers increased, adding to evidence that the industry is strengthening four years after the financial crisis.” Turns out there’s actually a good reason the banks are doing so well:

That’s because most of them have increased the historic spread between the interest they charge for mortgages and the interest they have to pay for their own borrowing and, of course, the now minuscule rates they pay to folks with savings accounts. As a result, according to a recent news story in the New York Times, bankers are enjoying ballooning profits from their mortgage business.

If the banks were using the formula that was in effect up until a couple of years ago, the 3.55 percent rate for a 30-year mortgage would be close to 3.05 percent. Or, they could increase the rates they pay savers by about a half percent.

So yeah, the gap between “what they pay you” and “what we pay them” got bigger despite mortgage rates near record lows.

I hope Fortune Magazine isn’t hoping for a subscription fee from me anytime soon.

In Closing:  you might want to disable Java; trying to change the law without bothering to involve lawmakers; 14.8% of Americans are on food stamps; and Boehner admits that the easiest way to win is for poor people to stay home on election day.

Enter the Dragon

It’s been a long road since 2004, when Space Ship One made its second, prize-winning voyage. Today, astronauts from the International Space Station got to tour the world’s first successful private spacecraft, the Dragon. It’s the first time a non-government vessel has docked with the ISS, and it brought lots of non-essential supplies. Why non-essential? Because nobody was 100% sure the craft would make it.

Dragon also brought James Doohan’s ashes.

This excerpt from the AP confused me, however:

The space station has been relying on Russian, Japanese and European cargo ships for supplies ever since the shuttles retired. None of those, however, can bring anything of value back; they’re simply loaded with trash and burn up in the atmosphere.

By contrast, the Dragon is designed to safely re-enter the atmosphere, parachuting into the ocean like the Mercury, Gemini and Apollo capsules did back in the 1960s. Assuming all goes well Friday, the space station’s six-man crew will release the Dragon next Thursday after filling it with science experiments and equipment.

What? How are we getting astronauts and cosmonauts down from the ISS then? Surely that’s not a one-way trip!

It’s tempting to talk about how this is a great example of private industry doing a job that government used to do. However, Dragon did take off from Cape Canaveral, a big federal government run “space station” as opposed to the (unfinished, mostly state taxpayer funded) Spaceport America in New Mexico.

There are private airports; will there ever be private spaceports?

In Closing: Income inequality in the Roman Empire; 50 years of fire; death by foreclosure (I still don’t know how this could possibly happen — nobody trashed out or did inspections??); and have a great, safe Memorial Day Weekend.

Practice Makes Perfect

I have a degree in music. Many hours of my life have been spent practicing piano, voice, and flute. Many more hours of my life have been spent leading others in rehearsal. Moreover, I have spent yet more hours of my life practicing physical activities such as yoga, weightlifting, dance, and drama. I know a few things about effective practice and rehearsal.

My current occupation has skills that must be practiced as well. We even have scripts to read and use. Whenever someone has to explain something many times, a script naturally develops. If you check in on a math teacher’s classroom, you will find that she has her own way of explaining concepts, and that she does it almost exactly the same way every time. She may not know it, but she has developed a script. Even when she gets derailed by a question, she will give an answer and then return to the unwritten script. Some people think they are above the use of scripts: “it sounds stilted” or “that’s not me.”  Actors use scripts every day: they work to make them not sound stilted, and they are paid to be someone other than themselves.

Just like some movies are better than others, some scripts are better than others. The math teacher in room 101 may have better scripts than the teacher in room 102, and her students learn more as a result. Which would you rather use: an organic but untested script, or a carefully developed and tested script?

Realtors generally don’t like to use scripts, or at least ones they are aware are scripts. Real estate trainers, on the other hand, are big on the practice and use of scripts. Trainers insist — and rightly so — that these scripts are proven to work, and will practice they will sound natural. However, first you have to learn the script. This goes beyond knowing what the words are and what they mean. It must be internalized, so the next line is the most natural thing you could possibly say: yes, just like “who’s there” naturally follows “knock knock.”

Recently, a trainer advocated “internalizing” by reading the script as quickly as possible and/or in funny voices and accents. I could not disagree more with this approach. The natural tendency is to perform in the same manner that we practice. For example, I once had to break a performer of doing a funny walk between music stands. He’d always done it that way in the practice room, and now he was unconsciously doing it on stage!

Practice itself does not make perfect. Perfect practice makes perfect.

In closing: 500 new fairy tales; fact checking; the TSA is a security risk; national debt; an excuse to keep people in prison past their sentences; federal deficit; and Too Big To Fail.

Is the 50 State Foreclosure Fraud Settlement Dead?

It sure looks that way!

The California Attorney General has pulled out of the settlement talks and plans to run her own investigation! I wouldn’t be surprised if the New York Attorney General followed, since he‘s already talked about investigating on his own, and says he’s looking forward to talking with her.

For that matter, since Nevada‘s Attorney General has taken Bank of America to court for (allegedly) not abiding by a 2009 agreement on foreclosures and foreclosure fraud, it would make sense for her to join the party as well.

In Closing: The D Word; I miss the old days too; I guess they were in the building so that makes them accessories?; Occupy Wherever (like, say, Vegas); yes, mostly; about time somebody called out this BS; mechanically challenged; hell no!; and Happy October.

Self-Serving Bunch of Asshats

Today, Bank of Asshat America said “Investors should be buying bonds in all categories of U.S. securitized debt, in part because the market will continue to shrink next year.”

Securitized debt. That’s bonds backed by things like real estate loans and leases.

Now let’s see, Bank Of Asshat, where might you come up with those? Perhaps from Countrywide??

How convenient that your analyst thinks we should buy the thing that you just happen to be selling. Very convenient.

In Closing: How enterprise crashed the economy; katsudon; too frustrated about the DINOcrats folding on tax cuts for people who don’t need them to say anything rational; Steven King will rip the throat out of your Twilight whiny sparkly vampires; bank failures; full one way, empty the other; you think Sarah Palin is bad?; jobless rate by level of education; young adult fiction; it never occurred to her that you might not be able to afford cereal and a banana (fine, b****, you adopt them all!); and this:
Rob Rogers

A Rock, a Hard Place, and a Pyramid

Today I saw an interesting pair of articles. First, it seems that many of our unemployed and underemployed neighbors are starting their own businesses. That really is good news, because some small percentage of those businesses will eventually be employers. It’s really hard to run a business even in good times, and these people are to be commended for their ability to take a lemon of a situation and try to make some lemonade.

But there’s bad news. Banks have collectively pulled a thousand million dollars of funding from small businesses last November alone. Here’s a great quote, emphasis mine:

The 22 banks that got the most help from the Treasury’s bailout programs have cut their small business loan balances $12.5 billion since April, when the Treasury began requiring them to file monthly reports on the tally. The banks’ total lending has fallen 4.6% in that seven-month period, to $256.8 billion.

As Wall Street megabanks return to health — and celebrate with lavish bonuses — President Obama and his administration have been pushing financiers to help spur a Main Street recovery. Small business owners are still reporting difficulty finding banks willing to extend the credit they need to launch, run and grow their ventures.

So to review: more small businesses and less money being lent to them. That is a recipe for failure. These are not the sorts of businesses that can generally get venture capital, and these business owners certainly can’t get home equity loans right now. And frankly, all too few of us have anything in the way of savings.

But wait, there is one kind of business opportunity that doesn’t require lots of capital outlay. Start-up fees are generally small and ongoing costs modest. Some of these opportunities don’t even require the small business owner to carry inventory. I am talking about multi-level marketing, or MLM for short. I’ve been offered multiple “opportunities” in the last 6 weeks, including cold calls, so it’s heavy on my mind.

Disclaimer: my parents used to be Amway distrubutors, and I am an Independent Beachbody Coach. I will be sitting for the ACE Certified Personal Trainer exam next week, and to be honest Beachbody makes a  number of complete in-box programs that are good fits for roughly 90% of people. If you’ve considered getting into P90X or another workout program (I can help you pick one if you want guidance), I sure would appreciate if you would order through me instead of the phone number in the infomercial.

Here’s how it works. Jane Businesswoman signs up and probably gets a starter package of whatever it is that the company sells. She is encouraged to sell this product to people she knows — the bigger your sphere of influence, the better your chances. Depending on the company/product, she may place orders as she sells merchandise, she may stock popular items, she might be able to give out samples (in fact she may be encouraged to buy sample packs and give them out as a marketing tool). But the real money is in getting other people to sign up to be her “downline”. Once she has Susie and Laura Businesswoman working in the system, she gets a cut of what they sell too. Jane will even get a cut of the people Susie and Laura someday sign up. And hey, if one of those people only orders stuff for personal use, Jane still gets a piece of the action.

The only thing that keeps this from being a pyramid scheme is that there is an actual product, and to make money somebody has to be buying it. Often the product is something that gets used up — soap, vitamins supplements, etc — so theoretically Jane, Laura, and Susie should all have repeat customers who come back to buy more on a regular basis. And because they all make money on the product, they are extremely enthusiastic about it.

Most of these plans have a couple of fatal flaws in my mind, which I can encapsulate in two questions: If this product is so great, why isn’t the company trying to get it into stores? and If your business is so great, why do you want to sell it to me instead of keeping the profits for yourself?

What it boils down to is that most of these companies are offloading their marketing costs onto their family of Businessmen and Businesswomen. When is the last time you saw a TV ad for most of the companies on this list? [Notice something? At least Beachbody does marketing for me!] If you know who most of these companies are, it’s only because somebody you know tried to sell it to you. Marketing campaigns are expensive. Hiring professional salespeople and sending them to retailers to get placed in stores is expensive. Putting Jane and her friends to work hawking product isn’t just cheap, it turns an expense into income! Sure, it costs the parent company a bit of theoretical profit to run this way. But they make up for it by turning their independent contractor sales staff into zealots who will buy anything the company makes.

I won’t bore you further, but if you want to know more about how such companies work, there’s these guys.

In closing: lines for peasants but services for the rich; weird scholarships; Japan Airlines files for bankruptcy; more on job creation; is anybody really surprised that the FBI broke the law to get some phone data?; already up to 4 bank failures this year; bankers don’t get it; most of them will turn out to be insolvent; and talking to children about disasters.