Busnies as Usual

I have just come across a concept that seems to have been hidden in plain sight. It is called "snowballing". Any process that accretes some quality or quantity to a base is like rolling a ball of snow across other snow to make the ball bigger.

That concept has come to be applied to consumer spending. It is noticeable in mortgage lending, consumer debt and automobile financing rollovers. At first it may have been a convenience to a person who was in a period of reduced income but had positive prospects for being able to realize greater income later. It is now applied with abandon and is business as usual for here-to-fore lending institutions that required the application of savings or reserves from the borrower to pay down so me debt or to forgo more debt.

With automobile debt, there seems to be a significant bubble of debt that is being accreted whenever the value of a used vehicle does not support a reasonable total payoff from one vehicle to another. The remnant debt is rolled into the new financing for the new vehicle. It is called being upside down in a contract.

I have now seen two news stories that describe such situations in auto loans. The resulting situation for the subjects in the story is that the debt has become unmanageable and the resulting penalties are predatory as regards the lending institution.

I am now shopping for a replacement vehicle. I have an SUV that is now 8 years old and it is in need of major repairs. Fortunately it is paid off. The repairs, however, are such that the cost of such exceeds the value of the vehicle even repaired. The materials and parts are available from suppliers but the labor to install them and to make to the adjustments for their operation is now off the page. This is as a result of the accretion of taxes, fees and insurance that municipalities have slipped into business liscening. The business owner must recover those expenses from his customers. The result is that the life of a once repairable product is reduced because the cost exceeds the value.

I shopped at a dealership that posts all its cars with a "no haggle" price. It is not until one enters the office of the business closer that the true price of the vehicle is known. I have walked out of two closing offices on this go 'round. At one time the dealer prep, tax, license and tranfer fees were listed on the vehicle. They now come in the closing documents. This is where the haggling begins. Once the financing closer gets through, the bargain or reasonably priced vehicle becomes a "snowball". I have found that the old simple interest contract of just 8 years ago has now become a complicated scheme of acccretion that makes the difference between owning a vehicle and being owned by it. the addons and the interest can reach 30% over the life of the financing. I ended a lease on another vehicle a couple of years ago. The contract had been loaded and the close out of the vehicle caused me to return the vehicle and to withhold the end of contract cost that had been creatively worked in to a snowball. I let that go to small claims and when my copy of the contract did not match the hidden contract of the financing agent, the claims were thrown out.


"To live outside the law, you must be honest."
Bob Dylan
Absolutely Sweet Marie

The snowball of real estate took its pounding. There is some talk among analyst that the complications of auto financing now festering will break out soon.

Anything that does not contribute to an orderly society will sooner or later find itself in reproach.

Please, be attentive, be intelligent, be reasonable, be responsible.

You have no business to believe me.

I ask you to believe nothing that you cannot verify for yourself. . .

If you have not a critical mind, your visit here is useless.

G.I. Gurdjieff

A Holiday Read Recomendation

I am unable to watch television, listen to talk radio or, read much fiction anymore. I am now reading the Greek that was the basis of a classic education until a hundred odd years ago and I and re-establishing a relationship with math functions and physics.

I have also become a book harvester. The number of recently published books that are available in thrift and used book stores is astounding. My current crop includes Malcom Gladewell's Blink and Tipping Point and Freakanomics by Bates and Levit. They Google easily. I have roughly $10, in $90 worth of cutting edge non-fiction. For the classics in Greek, Latin . . . any language, there is the Gutenburg Project. The current book business models are as archaic as watching for arriving sailing vessels from atop cathedral spires.

Really, the three books mentioned above are not just engaging, they will take you in their grasp and give you a brain shake.

May I also recommend a closer cleaving to Google for the near term. Buy some stock. If no stock then, dig around in it for all your worth. The old paradigms of knowledge and governance are about to be "Googled" (a verb for change) out of business.

Also. I have, through somewhat coerced circumstances, cut my ties to the wire phone company. I just settled my account with them and am now going VOIP, WiFi-enabled, and pre-pay cellular. (10 cents a minute) You will to in due time. The wire phone company is dead to a whole generation. The wire Internet is dead as well to that generation. The only morsel left from that technology is Optical Fiber and it may be too little too late for a consumer market. The only way that business is going to continue to have a say is by the imposition of regulations (on you) that they have preached were unnecessary and bad for business.

Regulation? Did you know that with little or no trouble, you, as a law abiding citizen with a credit card and a computer are able, this very evening, to buy any automatic assault weapon you could desire. If you wanted to own a quad 50 cal. (mounting your choice) setup, you could start those arrangements this very evening and have possession in a week or 10 day. You may do all this in a "Blink." We have reached a "Tipping Point". Our Western civilization has gone further into red shift. We can afford to show some love. If not that, then order the assault weapon. Just keep in mind that there is a whole new class of weapons available legally only to the military and to law enforcement that are one shot and the building comes down around your jelly like corpse that is puddling around your assault weapon.

This concludes by brain belch of the evening. Have a nice red shift.