Showing posts with label Analysis. Show all posts
Showing posts with label Analysis. Show all posts

Tuesday, January 10, 2017

Florida Woman Can't Be Blamed For Being Drunk in Wal-Mart




This poor woman was tricked into getting drunk in public. Somehow, Wal-Mart should be held accountable for the fact that she was able to get these five beers into her system before being helped by the employees. 

Don't they have security cameras? Aren't they there to assist? What kind of customer service is this?

Yeah, I know what you're going to say about personal responsibility and all that. But, really, when you're eighteen and there's beer everywhere, what are you supposed to do? Someone should have been there to help this poor young woman make better choices. Her support system broke down, the store's commitment to customer service broke down, and I see a lot of failure here on the part of local law enforcement to let her sober up and go home under her own power.













Tuesday, December 29, 2015

You Should be Able to Refinance Your Student Loan Debt




It took me a while to figure this out, so bear with me. Megan McArdle tries to pooh-pooh a very good question asked by Bernie Sanders:

The day after Christmas, Bernie Sanders asked a question on Twitter: “You have families out there paying 6, 8, 10 percent on student debt but you can refinance your homes at 3 percent. What sense is that?”


Finance types may snicker. But I’ve seen this question asked fairly often, and it seems worth answering, respectfully, for people whose expertise and interest lie outside the realm of economics.


The short answer is: “Loans are not priced in real life the way they are in Sunday School stories.” In a Sunday School story, the cheapest loans would go to the nicest people with the noblest use for the money: single mothers who need money to buy their kids a Christmas present, say.

That’s splendid for the recipient. But what about the lender? Let’s say you had $150 that you really needed to have at the end of the month, say to pay your rent. Would you want to lend it to the single mother whose income is stretched so tight that she needs to borrow money for Christmas presents, or would you want to lend it to some heartless leech of a securities litigator with an 800 credit rating who happens to have left his wallet at home? C’mon. You know the answer; you just don’t want to say it. If you really need the money -- if you cannot afford to turn your loan into a gift -- then you lend it to the better credit risk with the higher income, not the person who may find themselves too short to pay you when the loan comes due.


In aggregate, most of the money in your savings account is loaned out using this cold calculus, and unless you could afford to have that contents of that account suddenly vanish, you want it to be. That’s why poor people, on top of all the other unfairness heaped upon them, pay higher interest rates. And that is why secured loans, like mortgages, get lower interest rates than unsecured loans, like credit card balances and student loans.


Student loans are two-for-one in terms of risk: They are frequently made to people with no income, no credit history, and somewhat imperfect prospects; and they carry no guarantee of payment other than the borrower’s signature. If someone fails to pay their auto loan, you can take their car away. This ensures repayment in two ways: first, you can auction the car and recover some of the money that you lent out; and second, people need their car, and will scrimp on other things in order to keep it from losing it. The immediate personal costs of failing to pay your student loans, on the other hand, are pretty minimal, and people are going to take that into account when they decide whether to pay you or the auto finance company. That’s why the government has to guarantee these loans; the low-fixed-rate, take-any-course-of-study-you-want-at-any-accredited-institution, interest-deferred-in-school is probably not a financial product that would exist in the wild.


Secured loans have thus always carried lower interest rates than unsecured loans, and will do so until the heat death of the universe renders moot such questions.

And so on, and so forth. McArdle tries to demonstrate competence and knowledge here, but let's go back to the question that kicked off this discussion:

Bernie Sanders asked a question on Twitter: “You have families out there paying 6, 8, 10 percent on student debt but you can refinance your homes at 3 percent. What sense is that?”


Let's ignore McArdle and really answer the question. Let's say a family, who refinances their home, takes a look at their student debt and makes an honest effort to refinance that debt. They can't! And that's why the question needs to be answered from the viewpoint of a family with student loan debt as opposed to a recently graduated student with student loan debt.





McArdle is basically right about why a student who just gets out of college is charged a higher interest rate--they're a riskier proposition. But the family, with their home as an asset, is a much lower risk. Why wouldn't you allow them to use their home as collateral so that they could refinance their existing student loan debt?





That's the part that makes no sense. You have two people who are married and, if they're at a point where they own a home and refinance it, let's say they're also ten years into the thirty year process of paying back their student loans. They've been making ten years of payments on that debt at 7 or 8 percent while their home is financed at 3 percent. You could say that the only reason why they own their own home is because of the degrees they earned. 





As a condition of refinancing their student loan debt, you could minimize the risk and reduce the interest rate on their student loan debt by using the equity in their home as collateral. You're telling me that someone who has paid off a third of their mortgage is the same risk as a kid just out of college? Hell, no. They're a damned good risk and they deserve an interest rate cut. That would mean huge savings for the family and bring them greater financial stability in the long run, making it more likely that not only would they pay back their mortgage but that they would pay back their student loan debt.





And wouldn't that help bring down interest rates? Or am I being an idiot on purpose?





These are the kinds of scenarios that Sanders is really pushing--common sense changes to how we do things so that Americans can get out from under crushing levels of debt. And no one currently self-identifying as a Republican would even dream of such a thing--it runs against the economic self-interest of their primary voters as well as their donors.

Monday, February 16, 2015

Time to Get the Blood Out of the Stone


Do you really think Lance Armstrong is going to pay back the money?
A Texas arbitration panel gave a $10 million judgment for SCA Promotions in its suit against disgraced American cyclist Lance Armstrong for bonuses it paid for his Tour de France championships.
"We are very pleased with this result," SCA president and founder Bob Hamman said in a statement, per Brent Schrotenboer of USA Today. "It is hard to describe how much harm Lance Armstrong's web of lies caused SCA but this is a good first start towards repairing that damage."

The arbitration panel, which voted 2-1 in SCA's favor, will now turn its ruling over to a judge, who must give a final approval. SCA asked the panel to do so out of fear Armstrong would refuse to pay it the $10 million.
Armstrong can default on these judgments and no one would care. How bad can the public image of a man stripped of seven Tour de France victories get before people notice he's a sleaze?

Money is easy to hide. He can divest himself of property and fortune and tell the government to go pound sand. Token payments and tales of hard luck go a long way. He can live out his life free from accountability, albeit with limited potential to earn money and absolutely no dignity whatsoever.

I'm thinking he doesn't care. This is America. A wealthy man can do whatever he wants and reinvent himself when public furor subsides. Armstrong is little more than an afterthought now.

Friday, February 6, 2015

Bill Cosby is Not Done Raping Women




You would think someone would have taken Bill Cosby aside by now and said, "hey, you gotta disappear."

Is he really that defiant? Does he really think what's happened is going to just go away? On what planet does Bill Cosby get to skate on everything he's been accused of and just go back to wandering in and out of popular culture, making money and acting like nothing happened?

This is a man who cannot be advised of anything.

Saturday, October 18, 2014

This is Sexist




Veev vodka is hoping you'll accept the joke here. Unfortunately, it's a transparently sexist and somewhat culturally insensitive ad.

The stereotypically harsh and unattractive Russian/Slavic/Eastern European depiction of a hectoring wife is supposed to sell alcohol to who, exactly? I'm not sure who the target audience is but any man married to a "beast like this" (which is what the advertiser is signaling here) must want to drink themselves into a state of unconsciousness.

When you're using humor to kick down here, you have to remember that there is a fine line between satire and being stupid about cultural signifiers. You're not supposed to link your product to something that doesn't have some sort of redeeming quality. Being smashed, cheating on your wife, and fostering a stereotype isn't exactly the smart or uplifting quality being sought here.

Veev makes a vodka that is useful for your suicide by drinking because your horrible wife is a sexless babushka? Really? And now that means you gotta get a third or fourth bottle for your bros?

Stupid. And, of course, sexist.