Wednesday, September 22, 2010

Everything is Proceeding According to Plan

Over the last few months, I've been making some noise in this blog about my efforts to trim the fat from our household budget. In June, I posted a blog about my plans to save money on our TV and telephone bill. As of this past week, those plans have been put into effect -- and with marvelous results.

The plan in a nutshell was to eliminate our expensive cable TV package and replace it with a cheaper a la carte solution. In August, I contacted Comcast and told them to cancel my cable TV and telephone service in the middle of September. The Internet service was to remain in place as this would provide the foundation of our new multimedia-telecom solution. Cable TV was replaced with a combination of Netflix and MajicJack's IP telephony system became my phone service.

How We Did It
As I mentioned, I gave myself about 30 days lead time to set up a Netflix account and to order and install a MajicJack. While this was certainly a good idea and the right way to go about it, true to form, I waited around until the last minute with my finger up my nose and then had to scramble to get everything done. Even still, with crunch time upon us, I was able to swap out the old services and set up the new ones with remarkable ease.

Netflix - Setting up a Netflix account was a no brainer. I went to the Netflix website and in very short order, I had myself an account and a short list of movies in the queue to be sent to us. I opted for the $8.99 a month plan. This allows us to receive one DVD at at time which we can exchange as often as we want. We also gain access to a large library of movies and programs that we can watch instantly over the Internet. It was this instant access that I was primarily interested in. The DVD is really just a throw in for me. I needed to be able to provide Benjamin with "Caillou On Demand." And believe me, when he wants to watch it, it's a demand.

My biggest concern was bandwidth and available PC power. My high end gaming PC is upstairs in my office safely tucked away from Ben's little fingers. That meant that the older laptop was going to have to suffice for streaming this online content in the parlor, at least until I invest in something bigger. Would it be powerful enough to pull the load? The answer was a resounding "yes." Our old Dell Latitude D610 laptop (1.7GHz processor with 1GB of RAM) has been more than adequate for streaming cartoons and movies. I plunk Ben on the couch with a pillow, prop the laptop up in front of him, and he sits there very contentedly watching his favorite shows. Now, when he wants to watch Caillou, he says, "Watch Caillou on puter, Dada?"

The first DVD arrived Monday and I watched it last night. One of the real strengths to this service is that you don't have to pay return postage -- you receive a postage paid envelope that you simply drop the DVD into and send it off. Frankly, for $9 a month, I don't know how they make a profit after paying all that postage.

MajicJack - This was the bigger unknown to me. I had read enough reviews to know that it did work, at least for the majority of people. However, there were a number of reviews from people who said it was poor quality or just unworkable.

The device arrived by mail ( and claimed to be very simple to install. And it was. I plugged it into a USB port on the front of my computer and my Windows XP operating system immediately picked up on it and configured it. A window popped up and informed me that I would need to answer a number of questions in order to complete the installation and activate the service. The first few questions were marketing offers. "Do you want to buy additional MajicJacks?" "Would you like to sign up for additional years of longdistance service?" I didn't even know if the thing would work yet, so I wasn't about to hand over more money.

Once I pushed through these offers, I found one that was of more interest to me. I had been reluctant to discard my old phone number since it had been in the family for over 40 years. MajicJack isn't able to port your number over to its service, but I was pleasantly surprised to find that for $10 a year, I could choose a "vanity" number. I probably shouldn't have, but I elected to spend the $10 to pick up an easily remembered phone number.

I completed the process, submitted my data, and, after one minor glitch, I was up and running. For whatever reason, I didn't get a dial tone immediately. However, I unplugged the MajicJack from my USB port, plugged it back in and voila! Dial tone. I promptly ordered a celebratory pizza. Just kidding. I called Janet's cell phone, and then my mom. Janet didn't answer, but my Mom said that the call was very clear.

We've been using the MajicJack for three days now. All the calls have been clear and crackle free. Frankly, I think we're already at the point where we don't even think about it. I still have to look into the voice mail, call waiting, and other services that MajicJack provides. Also, at the moment, the caller ID isn't showing up on our phone's panel so I'll need to look into that as well. Hopefully, the caller ID won't be a problem. One big plus is that not only does MajicJack support 911 services, but it also provides 411 for free. That's huge in my book. Comcast would charge $2 per use of their information service.

What's Next?
I think the next step is simply logistical. Regretably, my wide-screen LCD TV doesn't have a VGA port to allow me to plug into a computer. So, at the moment, I'm either watching movies sitting at my desk in my office or we're flopped on the couch with a laptop on our knee. Neither of those works well for a family movie time. Someone did tell Janet that we could connect our Wii game station to Netflix and thereby stream movies to the TV. That is something definitely worth looking into, though I'd prefer not to have to rely on a wireless connection that much.

I plan on arranging a comfortable corner with a family computer where we can gather around a good size monitor and watch shows together. The PC will need to be secured to prevent toddler's hands from banging away at the keyboard or from trying to load peanut butter sandwiches into the DVD drive. (That would be bad.) I guess that's Phase II of the master plan.

The Final Tally
OK, so here is the bottom line. The numbers in my June post are accurate. I've traded a $165 dollar Comcast cable TV, telephone, and Internet package for a collection of similar services that now cost me only $65 a month. With the Internet that we retain from Comcast, we also have "basic cable." That gives us NBC, CBS, and ABC, as well as about a dozen other channels. Those provide us with news, sports, and local broadcasting. Everything else comes from the Interwebs.

Current Monthly Costs
$165 (Comcast bundle: TV, phone, Internet)

New Monthly Costs
+ $52 + tax Comcast Internet & Basic TV
+ $3.33 MajicJack per month (Paid $40 up front for the device and 1 year of service)
+ $9 NetFlicks (1 DVD & online content)
+ $0 Hulu and other online TV providers
~$64 Total Monthly Costs

Savings: $100 each month

Tuesday, September 21, 2010

Impending Doom: Or, How I Got What I Wanted and Screw the Rest of You

Reprinted from Market Ticker

The Only Part That Mattered In Obama's Telethon

Yes, telethon.

Let me direct you to the only question that had value from an investment perspective:

SANTELLI: "Mr. President. If I were to ask an investor would he invest in a company that for every dollar it spent it had to borrow 42 cents, I think that investor would think long and hard. Now if you look at the amount of money the government takes in and the amount of spending, those are pretty much the numbers for our government right now.

Does it bother you that 42 percent of our spending is borrowed even understanding that we have to deficit spend under tough times. How long can the U.S. continue to spend in that fashion without potentially hurting our long time financial health."

OBAMA: "Well, it bothers me a lot. It bothered me when I was running for office and it bothered me when I arrived and I had a $1.3 trillion deficit wrapped in a bow and waiting for me in the Oval Office.

So, the answer to Rick's question is we've got to do something about it. And we have to do something about it fairly rapidly. The first thing you do is not dig it deeper. That's why this tax debate is important. We can't give $700 billion away to some of America's wealthiest people. We've got to make sure we're responsible for our budget, that's point #1....

The one thing I have to say to the public is that about 60 percent of our budget is entitlements, Social Security, Medicare and Medicaid. And a lot of the discretion I have is somewhat limited on these programs.

Now part of the reason health-care reform was so important is because the biggest driver of our long term budget deficits is Medicare. If our economy is growing at 2 or 3 or 4 percent, but health care costs are going up 6, or 7 or 8 percent, than the budget will blow up no matter how many cuts I make in other programs..."

Right. But notice how he sidesteps this and tries to turn it into a growth problem? It's not.

19.6%: Social Security
16.1%: Unemployment/Welfare
12.8%: Medicare
8.2%: Medicaid/SCHIP
56.7% - right now, here, today.

100% - 42% = 58%, or basically the portion of the budget that encompasses entitlements.

Entitlements consume, for all intents and purposes, every dollar of tax receipts in the here and now. Not tomorrow, not as growth in medical spending occurs, not in the future. [Emphasis mine - Gleno]

Right here, right now, today.

Note that we haven't spent one nickel on defense yet. Nor have we paid the interest on the debt, which is quite mandatory. Nor have we funded one of our so-called "discretionary" programs, including Homeland Security, Energy, Education, HUD, Department of State, Veterans Affairs, Justice or anything else.

What President Obama told you is that The Federal Government has no plan to deal with this, not now and not in the future. It cannot even meet its own entitlement spending from the taxes it collects, leaving the entirety of the rest of the government, including national defense, to be put on the credit card.

You were told, today, that our government is insolvent.

Not "might become" insolvent if we don't change our ways.

The United States is insolvent, right here, right now, today, and The President announced it for all who cared to listen worldwide on national television.

President Obama says "we can't afford" that $700 billion. But that number is over 10 years, as are all numbers proffered by the CBO and other agencies when talking about the budget and debt. Those numbers are thrown around because they make you think they're big now, which is especially important when a politician wants to lie to you about what they can and will do about deficits tomorrow.

In point of fact it's $70 billion a year, or about $5.8 billion a month.

The Federal Government accumulates, at today's run rates, approximately $4.1 billion in deficits per day.

That is, this big fat "$700 billion" amounts to roughly 5% of the deficit, and that is what we would "collect" if taxes go up and people do not shift behavior as a consequence (but they probably will.)

Got it yet?

The "Bush Tax Cuts" are absolutely irrelevant to this discussion. The problem is not found in taxes and cannot be solved via tax policy. President Bush, via signing Medicare Part D, dramatically exacerbated this problem, but he was hardly the one who started it. For that you need to look back to FDR and Eisenhower, along with all the others since including The Right's "standard bearer" Ronald Reagan.

It is mathematically impossible to solve this problem without dramatically cutting back on entitlement spending - by something approximating one third to one half.

That isn't going to happen (voluntarily) either.

So as an investor you are reduced to one - and only one - question:

How long will the "bubble view" of both Treasuries and Equites hold up - that is, for how long will people buy both stocks (at ridiculous bubble-spending levels where the government is providing 12% of GDP's gross amount via deficit borrowing) and bonds (funding said 12% of GDP) before those very same people have sink into their skulls The Admission The President of The United States just made on National Television: WE DO NOT HAVE THE ABILITY TO FUND THE GOVERNMENT TODAY AND STRUCTURALLY NEVER WILL, BECAUSE HE DOES NOT HAVE THE DISCRETION TO DECREASE SPENDING IN THE PROGRAMS THAT CONSUME ALL OF PRESENT TAX REVENUES.

That's it folks. That's the only question to ask as a long-term investor.

For how long does the mass-delusion last?

Nothing else matters, because when (not if) that delusion ends the valuations of both stocks and bonds are going to collapse.

Not "dip", not "recede", not "sell off."


[Gee, think we might want to get entitlement spending under control? Do such things as government involvement in health care and "Recovery and Reinvestment" spending still sound like a good idea? - Gleno]

Wednesday, September 8, 2010

Burning Islam

It is rather astonishing how little attention the story of this burning has received, and yet it is compelling -- and very telling -- about the nature of the people involved. Imagine, an organized event, hosted by religious zealots, where people gather to watch a burning. Clearly these people want to send a message to all who witness it about just how serious about their religious beliefs; about just how strong their convictions are. And yet, no press, no media takes note of it.

Of course, I'm talking about the story of a young boy in Africa who was burned by Mohammedans. How they entered his village; how they forced him at gunpoint to gather firewood. Then, when the wood was piled up and it had been set ablaze, they demanded that the boy convert to Islam. They threatened him. He refused, saying that he was a Christian and that he could not deny Christ. When it as clear that he would not convert, they threw him onto the fire to burn alive while his family watched.

I'm guessing you haven't heard of this or of the countless other acts of violence, murder, and deprivation that are part of the daily routine that Mohammedans perpetrate upon Christians and other non-Mohammedans. I'm guessing that you didn't hear about it on MSNBC, CNN, or in the Boston Globe.

You can see the story reported on YouTube here. The boy survived, though his body bears the scars of vicious cruelty perpetrated by the Mohammedans. (See 0:14 through 0:43 for this account. View further for additional examples.)

You didn't hear about this story, but I'll bet that you did hear about the tiny church in Florida whose pastor has announced plans to hold a rally at which he will burn a Koran. How many people will die in that fire? I'm guessing far, far fewer than will die today at the hands of militant Mohammedans. Yet, where is the focus? Where has the press and media leveled its aim? Which story is our airwaves being inundated with?

In your entire life, have you ever heard of the US military telling a private civilian what to do or not do in regards to their free speech -- and a church at that? Give me another example where the Secretary of State has spoken publicly and officially about the intentions of a private citizen.

Let me tell you what Secretary of State Clinton should have said in her statement. In a rational world where Americans aren't cowering from Arabs and their ultra violent religion, she would have said this:

The United States does not condone the actions of the individuals involved at the "Dove World Church in Florida. However, the United States vigorously guards personal freedom and the right of these individuals to their protest Islam and to exercise their freedom of speech. Be it known here and now, that if you commit any act of violence against American citizens, here or abroad, we will end you.

Any country that claims to value freedom of speech and will not stand up and defend their own for exercising it, isn't worth the paper their Constitution is printed on.

Today the American people are beset on all sides by enemies such as we've not seen before in our history since our earliest days as a sovereign state. We have fewer allies than ever before, and this at a time when the Arab-Persian world, fueled by the hate-mongering of Moslem zealots, is once again pressing against western society. What's worse, the very government that is charged with our protection is one of our biggest obstacles to our safety. They have refused to secure our borders. They have sued those who have attempted to do so themselves. They excuse the construction of Moslem mosques at Ground Zero as "religious tolerance" yet they turn their backs as millions of Christians are persecuted around the world.

Yet, one fringe group of Christians speaks out (as is their right) against Islam and threatens a symbolic act of defiance, and the government -- our government -- rushes to the defense of those whose stated intention is to hurt, kill, and enslave us.

We have indeed met the enemy.


Wednesday, September 1, 2010