What happened at Kodak:

Smart Employee 1: “The world is passing us by as everyone switches to digital!”

Dimwitted executive: “By god, we’re a film company, always have been always will be!  Film will make a come back!”

What is happening at McGraw Hill now:

Smart employees: “The world loves Amazon and iPads, the new digital books are the future!”

Dimwitted executive: “By god, we’re a book publisher and we’re going to publish real paper books!  Hardcovers are making a come back!”

I can only thank god Steve Jobs created the iBook authoring tools, despite some of its flaws, it is the start of the first nail in the coffin of McGraw Hill.  The world is done with these idiots, their difficult idiotic platforms and copy protection scheme nonsense.”

So why I am so angry?  I’ve wasted hours trying to get a book I paid for to download after following a complicated process.  Geez, with Amazon, its ONE CLICK – hint hint idiot executives at MH.  I don’t need nor do I like your stupid virtual bookshelf!

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Let me just give you a hint of some of the idiotic questions I have to answer:

What is your favorite destination?

Who is your favorite actor?

What is your favorite color?

What was your favorite vacation?

What city did you grow up in?

These questions are stupid on so many levels I don’t know where to begin.   I got caught up on an account I setup 5 years ago with the “who is your favorite actor” and I honestly couldn’t remember who my favorite actor was 5 freaking years ago.  Seriously, who has a favorite actor consistently for life?  Stalkers?  What about favorite vacation?  Well that changes for me year to year so how the hell am I supposed to constantly update this?  If I went to Hawaii in 2010 then Paris in 2011 then Thailand in 2012 and I’ve added 3 new accounts each year how I am supposed to constantly remember to update all my questions?

I also never answer these questions honestly because all websites tend to ask the same ones so if one web server is hacked then bingo some hacker has the answers to your questions.   Now if you have 100 usernames and passwords to remember, you now have 300 questions to have to remember questions to for and most probably don’t bother so what happens?   That’s right, we all end up calling the help desk and answer another set of stupid questions that everyone can easily find the answer to by looking up public records:  What is your social security number?  What is your birthdate?  What is your mother’s maiden name?   None of this wouldn’t be a problem if it weren’t for the fact that most systems force you to change your password every thirty days?  What the f##k for?  I’ve had the same password on Amazon for 10 years and I’ve never been hacked!

To everyone that owns a website and has a username/password & security questions to answer, the reason I don’t shop at your website is because I don’t want another username/password and set of questions.  It’s also yet another reason I primarily use Amazon for all my shopping even when I find something else cheaper on a website -I simply don’t want the hassle of another username/password/set of questions to answer.   I stick to amazon because they were the first username/password I setup and Amazon doesn’t hassle me every thirty days to change my passwords!

I really would like to know who the first moron was to come up with this scheme because everyone has now copied him/her and I really wish I could slap the hell out of them!

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First, it took four hours on the phone with over half a dozen people to cancel my account. I was on hold for 10 to 30 minutes at a time when I got disconnected or transferred to a dead phone. When I finally got to the disconnect queue, I couldn’t remember my security code or that stupid security question “who is your favorite actor?” How am I suppose to rembrandt that question for years ago? I am sure a few people get frustrated and end up staying subscribers just a little longer or there is a huge avalanche of tv defectors.

I finally managed to get it all sorted out and cancel my service but that’s when I learned I would have to go to the UPS store to drop off the equipment and have the UPS people pack it for me.

Secondly, I went to the UPS store and the lady knew exactly what I was there for because three other people had gone in to cancel their AT&T services the same day. She said she does that all day every day! I had packed the remotes, power cables and receivers but she insisted on only packing the receivers. I told her the form I was sent explicitly stated that the remotes, power cable and receivers needed to go but she insisted it was just the receivers. She gave me a receipt for the items so I will fight any charges AT&T tries to saddle me with on the remotes. Interestingly, she told me AT&T has a habit of charging customers for the equipment even though it’s been shipped back. She told me to make sure I keep a copy of the receipt because it was likely AT&T would charge for the equipment and that she gets customers coming in asking for a reprint of the receipt but they only keep backup for a few days not a month or two.

My last story about AT&T is that I now know of at least a half dozen people canceling a variety of services and buying Roku boxes and signing up for Netflix, HuluPlus and Amazon and with a potential upcoming Apple TV it may be the best platform for television. Ain’t progress grand?

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A device with “apps” for viewing TV/Entertainment. Currently, XBOX, Wii, PS3, iPads, iPods, iPhones and almost any computer will allow you to watch TV through apps like Netflix and Hulu Plus. For my large TV screens at home, I have specifically purchased AppleTV device and Roku boxes for my TVs. Both run HDMI and provide HD quality although the AppleTV is only 720p while the Roku is 1080p.

The Roku box will run you about $50 or so depending on the model you get while Apple TV will cost you $99.

Netflix will cost $9 per month.

HuluPlus will cost $8 per month.

Amazon Prime Streaming is FREE if you have Amazon prime $39/year (students) or $79/year for everyone else ($3.25/month for students or $6.58/month for everyone else).

So assuming you have two TV’s at home and you want this setup, your total cost for the first year will be $100 (Roku) + $108 [$9 x 12 (Netflix)] + $96 [$8 x 12 (HuluPlus)] + $77 [$6.58/month (Amazon Prime)] = $381 for the first year.

After the first year, the annual recurring costs (assuming no increase) will be $281 since the Roku boxes are a one time charge. This is effectively $23/month for basically unlimited movies and TV shows from around the world. Contrast the $23/month for this build your own package versus the current $168 AT&T Uverse bill I get and it’s a no brainer! Keep in mind that if you already own a Wii or XBox you can use those devices and not need the Roku at all! I’m currently watching Breaking Bad (on Apple TV), Grimm (on HuluPlus) and other shows on Amazon Prime that I’ve never had time to see and the best part of all is that I can take my subscriptions with me on my iPad when I travel!

Goodbye AT&T uverse, I wish you the best of luck but if you want me back, offer me a-la-cart programming because I don’t want 500 ESPN channels. I’ll make it easy for you here are the only channels I watch: Smithsonian, History, Discovery, broadcast networks (ABC, NBC, CBS, FOX, PBS). The kids watch a couple of the Disney channels but they watch too much TV now anyway but if you throw them in with the others for $25/month or less then I might come back. Of course if you want to really save money, just buy an over-the-air antenna and drop the subscription altogether….

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It doesn’t stop there though, we found some great hand crafted knives that my son would have loved to have since he’s a scout but we passed on that too because we figured the TSA would confiscate this “dangerous” weapon.   Why not order online?  Well that’s what we generally do but some states restrict wine sales across state lines but the real problem for us is having to have someone home to sign for the wine when it gets there which is a difficult thing to do with my constant travel and my wife’s other daily activities.   Lately, thefts of deliveries has been up in the area as well and I would rather not have those items stolen so if something isn’t confiscated by some government bureaucrat, it’s getting stolen by some petty thief and then we expect to grow this economy?

On the flip side, I went to an electronics store to buy some old rabbit ears antennae since I’m dropping my cable subscription this week and found some interesting ones that didn’t look like rabbit ears at all.   The electronics retail price was $49.99 and I used Amazon’s price check app on my iPhone 4s and saw it on Amazon.com for half the price and pay no sales tax to boot!  So I clicked and ordered it online and will get it in a couple of days at my door and saved $25.00 in the process.    I am convinced that retail is dying a slow painful death and most of it will be gone soon which is probably why Sears and Kmart are shuttering stores, the retail model doesn’t make any sense anymore.    We went this weekend to Bed, Bath & Beyond to buy an outdoor table cover for some patio furniture and the sales clerk told us to look online as they didn’t carry  that in the store.  WTF?   What’s the point of going to the shop at all if it’s all online?

With 80 million boomers heading for smaller homes, wheelchairs, and lower consumption of goods, how will this economy survive?

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I typed this in the Bing search engine, “shared secured loan 1.75% credit union” and I got a ton of responses.

Here are just some of the credit unions that offer this low secure loan rate.

Polish & Slavic Federal Credit Union (New Jersey) – Rate between 1.75% to 2.50%

AOD Credit Union (Alabama) – Rate of 1.75% above CD rate.  Note: CD rate is low.

Vantage Credit Union (Illinois) – Rate of 1.75% (variable).

I am not endorsing any of these institutions nor am I validating the rates but simply reporting on what I saw on the web for each credit union.  To be fair though, the rates do vary greatly from credit union to credit union and some of the terms are fixed for a period of time anywhere from 24 months to 60 months while others vary month to month.  It would be great to have a consolidated website that reported the current rates for each credit union similar to what BankRate.com does for banks but I couldn’t find any website that maintains that list, perhaps a niche market for a savvy web-entrepreneur?  I am beginning to think this is one of the best kept secrets out there!   I must have been lucky to have a credit union with such a low rate right off the top!

So what I did was get a fixed rate of 1.75% for a period 36 months which would reduce my student loan from the 6.8% rate it’s at now.    Finally, people are asking me what happens when you take the money out and the answer is you can’t.   At least not take any out if there is a remaining balance or perhaps a portion thereof and I haven’t even considered it because in a pinch you can simply direct the payoff from the secured deposit over to the loan.    Again, this financing framework isn’t probably for everyone especially if you’re living paycheck to paycheck but then again, I’m not writing for that demographic anyway so this shouldn’t be the solution to debt problems for the weary.

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But now I’m thinking I might be able to move some IRA money into an IRA savings account at the credit union and borrow at 1.75% and pay the remaining balance of my mortgage off which is currently at a low 3.25% interest rate.   Alternatively if I am ever in the market for any kind of loan, why not borrow from myself at 1.75 percent?   I haven’t officially asked if I can do this and that’s my next step on it but it makes perfect sense.

You may be asking why I don’t simply take the money and pay off the loan and avoid all interest altogether and the answer is simple:  reserves.   The money I’m using is essentially emergency cash reserves that I use for emergencies but since I also have secondary reserves at my brokerage account and I still have most of that student loan money in another credit union sitting in cash it makes sense to borrow at nearly negative rates (if inflation is running 3% then borrowing at 1.75% means I’m deflating the debt nicely).

If you’re interested in looking into this strategy I suggest you google “credit union share secured loan” or visit your local credit unions.  Shop around as rates vary and each major city has at least dozens of credit unions.

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Problem #1 – Normal Distribution fantasyland – Academic professors preach normal distribution theory as the solution to all problems.   There hasn’t been a financial class that I haven’t taken where normal distribution formulas are used to guesstimate what will happen next which is completely absurd when it comes to financial instruments because those numeric valuations are based on human thinking activity, prejudices and greed not innate characteristics such as height, weight, hair color, etc.

Problem #2 – Head in the sand  attitude – Academic professors are under constant pressure to make a name for themselves and their university by coming up with some new theory that will transform the world so the obvious net result is the head in the sand problem where academic theory is justified and rationalized despite the clear and apparent failure of such theory (see problem #1 for example).   I took an international finance class whereby the professor insisted that stock charting, technical analysis, fundamental analysis, etc really worked.   I argued helplessly for the entire semester and ended the argument with a simple question:  if these systems work well for making money then why aren’t you a wealthy billionaire baron?  (Discussion ended).

Note: I’ve read a few articles where well known egghead Ph.D’s were brought in to devise these bundled crap mortgages and if you haven’t guessed by now, normal distribution was used as a basis to guesstimate the default rate.  Hmm…it ended up being completely wrong, how did that happen? (for answer see Problem #2).

Problem #3 – If everyone else is doing it, it must be right.  My biggest criticism and complaint of my MBA program is that it isn’t unique.   I checked around and the curriculum is pretty much the same as most other universities and I think this is a huge failing.   We need to get to a point where more “niche” education is taking place around specialization around certain fields of study but there is wide reluctance to do so and I’m assuming because it’s probably viewed as too risky.  I would love for each university to develop “ecosystems” around specialized learning just how Apple built their iTunes model for music, video and entertainment then simply build on it.   Here are three areas universities should build niche’s around:  energy, health care, technology.

I am personally debating hard whether the investment in time and money has been worth it.   On the one hand, the MBA program has validate much of what I already knew and the confirmation will be the piece of paper I get at the end of the program with “Degree” stamped on it.   On the other hand, I spent a great deal of time doing pointless research largely so professors can find the next big thing (I have no doubt some professors skim off of their students) research and ideas and made too many sacrifices along the way.

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So how to profit?

Option 1 – Covered calls on FAZ.   As of this writing, FAZ closed at $40.63 and the January $41 strikes are selling for $6.21.   The strategy here is buying 100 share blocks of FAZ and selling at-the-money calls for January.  Assuming the market drops by January expiry (FAZ rises) then you’ll be assigned and keep the premium (16.19%) in a little over 45 days!

Option 2 – Buy FAZ at-the-money or in-the-money calls.  As stated above, the options are trading at $6.21 and with $1300 you could purchase a couple of contracts and if the market tanks these options will be worth quite a bit as FAZ rises.  Money will be made if FAZ rises above $46.21 by January expiry.

Option 3 – Setup a Strangle.   Sell FAZ $36 strike (PUT) for $4.05 and buy the FAZ $41 strike for $6.21 (net cost of 6.21-4.05 = $2.16) which allows you to utilize that same $1300 to buy more for less.  I personally would expect the PUTS to expire worthless (since I’m biased to the market falling which means FAZ would rise) and the calls would be worth more.

For option 3, it goes without saying that you should be well capitalized to be able to take the PUT assignments, meaning for every contract you sell you need to have $3,600 in the bank to absorb the shock.  Also note that leveraged ETFs do swing violently on a daily basis so this strategy isn’t for the faint of heart or cry babies.

Choo….choo!  What’s that sound?  It’s the sound of the money express leaving the train station heading to richville…..you’ll find me giggling all the way to the bank

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The cover page shows a couple of flat panel TVs, Kindle and a laptop.  Pages 2 and 3 continue with more TVs and BluRay players and home theater sound system.  Pages 4 and 5 are more electronic gadgets (cell phones, digital cameras and portable dvd  players).  Pages 6 and 7 are laptops, printers, and more TVs. Pages 8 and 9 have video games.  Pages 10 and 11 have dvds and bicycles.  Pages 12 thru 15 are toys for kids.   The latter pages are for sheets, vacuums, chairs and kitchen stuff.   Finally we come to tools and sports stuff and holiday decorations.

On the surface it looks like there are many great items for sale but if you think about the average middle class family, most probably already have most of this stuff.   How many TV’s do manufacturers and retailers expect Americans to consume?   The same goes for the other items such as digital cameras.   Cell phones have cameras, iPads have cameras and I already own a digital SLR and three (yes 3) portable digital cameras.    Computers and printers?  I have 6 computers and 2 laser printers.  The kids have a Wii and Xbox 360 and gave away our PS2 because there’s only so many video games that can be played in any given day!

Where is the innovation?  Where is the new cool item I should go out and buy?    The kids don’t even know what to ask for Christmas this year because they have everything!  They are literally clueless as to what they should ask for since there is nothing appealing out there for them.

Ironically, I may go super low tech and super cheap and just get my kids trivial stuff like iPhone covers for their new iphones which they seem to love.

No doubt, next year the Black Friday’s ads will show the same array of stuff to buy and I’ll wonder the same thing next year.    If you’re listening out there, please give me something unique, something special, something different.   Oh Steve Jobs why did you have to die!

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