Personal Finance

A Few Thoughts on Data Aggregation

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Big Brother on the Make….or perhaps, the take….

Outside of specific and targeted investigational contexts for law enforcement and intelligence, the Federal government really does not need to know what products we buy at the grocery store, what books we buy or check out at the library, the magazines to which we subscribe, our car payments, what kind of food we eat, the websites we visit, how we use our credit cards and where. It’s not actually the government’s business, and presumably, the 4th Amendment indicates they need a compelling interest before they are allowed to snoop.

Senator Chris Dodd (D-Conn) is working hard….to make sure the Feds are watching your every move. Unless you are an illegal alien of course.

What passes for Liberalism these days is a strange ideology – American citizens are to be treated as criminals to be kept under continuous government surveillance but if you are a foreigner who enters the country illegally, you should get special dispensations from police questioning. Or unless you are a foreign terrorist overseas or in communication with one. WTF?

Cross-posted at Zenpundit

Human Networks and Single Points of Failure

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Ronald Cass’s column about Bernard Madoff is insightful:

The sense of common heritage, of community, also makes it less seemly to ask hard questions. Pressing a fellow parishioner or club member for hard information is like demanding receipts from your aunt — it just doesn’t feel right. Hucksters know that, they play on it, and they count on our trust to make their confidence games work.
 
The level of affinity and of trust may be especially high among Jews. The Holocaust and generations of anti-Semitic laws and practices around the world made reliance on other Jews, and care for them, a survival instinct. As a result, Jews are often an easy target both for fund-raising appeals and fraud. But affinity plays a role in many groups, making members more trusting of appeals within the group.

“Affinity groups” (to use modern marketing-speak) may be particularly vulnerable to fraud because trust works both ways. Group members tend to be more trusting of other group members than of outsiders, and this caution toward outsiders protects the group. But it also means that group members tend to let down their guard against other group members. This is OK most of the time because the extra caution about outsiders keeps predators at bay, and business people who gain admittance to the group are more likely to be trustworthy than outsiders are. However, a sociopath who penetrates the group’s defenses may wreak havoc — the single-point-of-failure problem.

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Certificates of Deposit (CDs) In Your Brokerage Account

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There have been some recent changes on FDIC insurance limits for CDs and there is a (relatively) new way for time strapped investors looking to buy CDs, which is through a brokerage account. This method allows investors to pick from a variety of institutions online at a single place and receive the income in their brokerage account rather than physically go from place to place to purchase CDs and then receive a pile of paper at year end. There also is the ability to sell CDs in the market during the life of the CD (i.e., you could sell a 5 year CD 2 years into it) at either a gain or loss depending on the direction that interest rates have moved in the interim (down, you will have a gain, and up you will have a loss). You can keep it until maturity and always get what is promised, this is just another subtle opportunity. Read more if this topic interests you.

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“Why stay in college? Why go to night school? Gonna be different this time …”

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Via the usual source, why bright kids should, in many cases, drop out is thoroughly explained at America’s Most Overrated Product: the Bachelor’s Degree. It’s positively Freakonomics-worthy stuff. Turns out I knew what I was doing at age 19 … avoiding a s___load of debt and not compromising my future earning power much, if at all.

(Actually, in my case there is almost no doubt I would be both 1] making less money and 2] living somewhere more expensive right now if I’d somehow stayed in the academic world. Figure student debt into that and my net worth would be perhaps a quarter its present value, and that’s if I were lucky.)

Key passage: “You could lock the collegebound in a closet for four years, and they’d still go on to earn more than the pool of non-collegebound …”

The Talking Heads would agree.

(Related: lengthy six-month old post, Get Out the Hankies, with tons of comments, over on Transterrestrial Musings.)

UPDATE: More food for thought …

More Real Estate Trouble in the Condo Market

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My neighborhood, the River North area of Chicago, has seen an explosion of condominium developments over the last decade. Loft buildings and business warehouses were the first to be converted, and then purpose-built high rise condominiums began to populate the neighborhood. While Chicago likely isn’t at the same frenzy level as South Beach in Florida, we certainly have a vast overhang of unsold and in-process condominiums on the market right now. Below you can see some of the recent construction (not all condominiums, a lot of it is office space) including the Trump Tower (on the left) as well as other developments. The “beige” building in front has a forlorn “Condos” sign at the top.

Today I was reading the Sunday Chicago Tribune real estate section when I noticed an article titled “Credit Getting Even Tighter for Condominium Buyers”. If you own a condominium and are interested in its value or are consider buying a condominium I strongly suggest that you research this issue in greater depth.

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