From Maryland Public Television

Manage Your Debt, Repair Your Credit & Avoid Scams MPT program June 1 offers straight-ahead advice from experts and the opportunity for free, confidential advice with a live 90-minute phone bank

Owings Mills, MD—If you’re confounded by how to manage mounting debt while repairing credit and avoiding financial scams, you’re not alone.

Maryland Public Television (MPT) is stepping forward with straight-ahead advice from experts and the opportunity for free, confidential advice with a special edition of Direct Connection and live 90-minute phone bank.

Join MPT Monday, June 1 at 7:30 p.m. as host Jeff Salkin talks to financial pros Robin McKinney (Director, Maryland CASH Campaign), Deborah Owens (President, Owens Media Group) and Jim Godfrey (President & CEO, Consumer Credit Counseling Service of MD and DE, Inc.) about how to manage debt, repair credit and avoid scams that prey on average consumers during tough economic times. Viewers are invited to call in or e-mail questions for experts during the live program at 1-800-926-0629 or directconnection@mpt.org.

A live phone bank (800-222-1292) staffed by representatives of Consumer Credit Counseling Service of MD and DE, Inc. will accompany the program to provide viewers with trustworthy, confidential, free advice on credit, debt and scams.

The 90-minute phone bank will open at the start of the broadcast and remain open for one hour after its conclusion (7:30 to 9 p.m.).

For more information on MPT, visit mpt.org.

Posted by Jay Hancock at 3:36 PM | Permalink | Comments (1)
Categories: Personal Finance
        

Call me stupid, but it's difficult to see how Electricité de France's minority stake in a subsidiary of the holding company that owns Baltimore Gas and Electric -- and one seat on the holding company's board -- gives it "substantial influence" over BGE. Whether or not EDF would obtain substantial influence is the test of whether its deal to invest billions in Constellation Energy's nuclear operation is subject to approval by the Public Service Commission.

Constellation is BGE's holding-company owner. It would have a good case if it told the PSC, the governor and the legislature to jump in the Inner Harbor. But once again Constellation is negotiating with policymakers rather than litigating, as Laura Smitherman and Hanah Cho report in today's Baltimore Sun. The governor wants price reductions for BGE customers, investment in clean energy, protection of BGE against financial raids by outsiders and "absolute transparency" on compensation to Constellation boss Mayo Shattuck. Whatever "absolute transparency" means.

I'm not saying Constellation's executive pay policies and the experience of BGE and its customers in the wake of deregulation aren't a problem. Maryland policymakers have tried to hold previous Constellation deals hostage to try to get concessions for BGE customers. This time the legal ground looks more slippery. It doesn't seem to matter to Constellation. The hostage could probably walk out the door and hail a cab. But instead he's negotiating the ransom.

Posted by Jay Hancock at 9:50 AM | Permalink | Comments (5)
Categories: BGE/electricity
        

Reaction to Friday's column on how Maryland's estate tax increases the motivation for millionaires to get the heck out of the state.

From a millionaire who changed residence to lower-tax Virginia. He says the estate tax AND the recent income tax surcharge on high earners are pushing the well-off to leave Maryland.

The implication from one of the people you quoted is that people in my position would never ‘move’ for a 1 or 1.5% tax difference [the millionaire bracket for the income tax]. Are you kidding me? I grew up poor. A $32,000 tax difference is VERY real, even for someone in my position. That’s how much we saved in 2008, filing in Virginia and not in Maryland (besides the millionaires tax, base rates are lower here). The bottom line is that Maryland... lost more than $150,000 in [total] annual income taxes from my family alone that would not have been lost if it were not for the O’Malley administration’s confiscatory extra tax grab.

From another millionaire:

Having , in the last two years, acted as an executor for an estate where the deceased could have lived anywhere, I can heartily ratify what Lowell Herman had to say. In fact, I am faced with a residency decision myself. Merely changing residence to Delaware would save my family the maximum.

From Del. Susan W. Krebs:

Great column on the estate tax last week. I agree with you that the estate tax is what’s driving many of these millionaires out of Maryland.

I have put in bills to fix the Maryland estate tax for the past five years, but they have never even gotten out of committee. This year, in an effort to at least get legislators on the record, I tried to amend my bill onto the inheritance tax bill for domestic partners. The amendment would have aligned the Maryland death tax with current federal law. As you can see by the roll call vote, my amendment failed.

UPDATE: And here is the other side of the coin: the rich folks who complain but don't do anything about it, as told by commenter Ruth.

Have listened to two well-off family members bemoan their lives in our state for years. They constantly insist 'they're not staying here' yet, here they are. Ta-Ta, the rest of us will soldier on in the Land of Pleasant Living. Don't let the door hit you on the way out.......

Posted by Jay Hancock at 10:12 AM | Permalink | Comments (11)
Categories: Taxes
        

The Government Accountability Office spends 43 pages "analyzing" why the United States gets lousy global PR despite having spent billions on its image. Hint to the GAO: It's not the advertising. It's the policy.

Since the September 11, 2001, terrorist attacks, the U.S. government has spent at least $10 billion on communication efforts designed to advance the strategic interests of the United States. However, foreign public opinion polling data shows that negative views towards the United States persist despite the collective efforts to counteract them by the State Department (State), Broadcasting Board of Governors (BBG), U.S. Agency for International Development (USAID), Department of Defense (DOD), and other U.S. government agencies. Based on the significant role U.S. strategic communication and public diplomacy efforts can play in promoting U.S. national security objectives, such as countering ideological support for violent extremism, we highlighted these efforts as an urgent issue for the new administration and Congress. To assist Congress with its oversight agenda, we have enclosed a series of issue papers that discuss long-standing and emerging public diplomacy challenges identified by GAO and others.

UPDATE: Alex says, in comments: "giving Yugo the ad dollars of Chevrolet will not change things"

Posted by Jay Hancock at 8:14 AM | Permalink | Comments (4)
Categories: Marketing
        

The "arm's-length transaction" is an ancient legal hallmark of integrity and fairness. Are the transacting parties sufficiently independent to achieve an honest deal? Or do they have conflicts of interest, a motive on either side to overprice or underprice the business? Are there undisclosed codicils, commissions, contingencies? Now the Wall Street Journal reports:

Some banks are prodding the government to let them use public money to help buy troubled assets from the banks themselves.

Banking trade groups are lobbying the Federal Deposit Insurance Corp. for permission to bid on the same assets that the banks would put up for sale as part of the government's Public Private Investment Program.

PPIP was hatched by the Obama administration as a way for banks to sell hard-to-value loans and securities to private investors, who would get financial aid as an enticement to help them unclog bank balance sheets.

Having a bank buy toxic assets from itself using mainly taxpayer money is the antithesis of a fair and honest transaction. The FDIC should say "no." But that doesn't mean there won't be plenty of other shenanigans. See Hancock column here:

The ways to steal from a $3 trillion government program are as numerous as digits in the U.S. national debt, according to the report.

Companies hired to manage toxic assets could manipulate the price of securities in which they own independent stakes. Somebody running a bailout fund could overpay for junk mortgages owned by a pal.

Banks could overprice securities they use for collateral to get government loans. Or they could overprice assets they sell to the Public Private Investment Partnership, a consortium of government and investors. Money launderers must be drooling.

Having spent years fraudulently inflating their incomes to get big mortgages, unscrupulous homeowners now have an incentive to understate what they make so they'll qualify for a government-sponsored modification that lowers principal or interest. Mortgage companies could charge loan-modification fees to homeowners even though the government isn't charging anything.

Posted by Jay Hancock at 12:53 PM | Permalink | Comments (4)
        

Cool map of Madoff victims from ResourceShelf. Decent amount in DC, relatively few in Baltimore.

Posted by Jay Hancock at 11:16 AM | Permalink | Comments (0)
Categories: The Great Recession
        

I was an early enrollee in BGE's Peak Rewards program, where they install a digital thermostat and get the ability to briefly shut off your air conditioner on the hottest summer days. I haven't noticed any difference in summer cooling. You get up to $200 in BGE credits for letting them do this. Now BGE says it has signed up 75,000 households, which will substantially reduce demand and the need for new, polluting power plants.

BALTIMORE, MD – Baltimore Gas and Electric Company (BGE), a subsidiary of Constellation Energy (NYSE: CEG), today announced it has enrolled more than 75,000 residential customers in PeakRewardsSM, a BGE Smart Energy Savers Program SM and one of the largest electricity demand response programs in the country. When it reaches its enrollment goal, PeakRewardsSM is expected to reduce enough demand for electricity during peak usage times to power 170,000 homes, the equivalent of the generation capacity of a small-to-medium-size power plant.

Posted by Jay Hancock at 10:37 AM | Permalink | Comments (14)
Categories: BGE/electricity
        

Are liberal remedies or conservative remedies keeping the next Great Depression at arm's length? Ed Yardeni says the answer is "yes."

Unholy Alliance? We are all Keynesians and Friedmanites now! The two camps of macroeconomists were once hostile rivals. No more. They are working together to avert a depression by widening the federal deficit and pumping up the monetary base in an unprecedented fashion. Their efforts seem to be working just as K&F predicted.

J.M. Keynes advocated deficit government spending to save the economy from the worst. Friedmanite monetarists blame depressions on money-supply shrinkage and support goosing the money supply when deflation and depression threaten. The Bush/Obama response to last year's crash has been to apply both remedies. So no matter what the outcome, the argument will continue.

Posted by Jay Hancock at 10:20 AM | Permalink | Comments (1)
Categories: The Great Recession
        

The Treasury Department's "stress test" laid out an "adverse" scenario for the economy and then calculated the the future effect on banks. As Calculated Risk points out, prices so far are tracking pretty closely with the adverse scenario. However, it's early in the process -- prices could still start ending their free fall. And, as CR's graph shows, home prices according to the Case-Shiller Index are doing slightly better than the adverse scenerio.

Posted by Jay Hancock at 10:18 AM | Permalink | Comments (1)
Categories: The Great Recession
        

Don’t necessarily bet on a corporate employer if you’re a new grad or other job seeker. Nearly all the Maryland sectors adding more jobs than they’re shedding are financed by the taxpayer, according to new government figures.

Private Maryland companies ditched 78,000 jobs during the 12 months ending in April while state, local and federal government added 6,000, says the U.S. Labor Department.

That’s the worst showing for both sectors in more than a decade, but at least government on the whole is hiring. Most growth is in federal jobs, as the Census Bureau gets ready for the 2010 head count, and in state-employed teachers.

Of the private employers that are hiring, many seek seasonal help for summer tourism. Even in that industry, helped by lower gas prices, total jobs should be lower than last year. And hospitals, clinics and social services employers are still adding positions.

Beyond that it’s a matter of finding the “least bad” sectors. Manufacturing, finance and construction are in the tank. Utilities, telecom and transportation services seem to be holding their own, but they’re vulnerable unless the economy starts improving.

Posted by Jay Hancock at 8:00 AM | Permalink | Comments (0)
Categories: The Great Recession
        

The latest Forbes column from Johns Hopkins econ prof Steve Hanke:

WANT TO KNOW WHERE THE REAL ACTION will be over the coming months? Forget stocks, think foreign exchange. There are tectonic moves afoot in the currency markets these days. During the past year the Polish zloty has fallen by 23% against the euro and 11% the Hungarian forint. Now both countries are talking about replacing their currencies with the euro.

The International Monetary Fund likes this idea and wants other
European countries to “euroize” as fast as possible.

The Chinese are wringing their hands over the U.S. Federal
Reserve’s ballooning balance sheet. Beijing is threatening to halt
its Treasury buying if the dollar slides and has suggested that
IMF Special Drawing Rights (SDR) replace the greenback as the
world’s premier reserve currency. A United Nations panel has
seconded China’s motion, but just in case it doesn’t happen,
China is buying gold.

Posted by Jay Hancock at 4:12 PM | Permalink | Comments (0)
Categories: Currencies
        

Reactions to today's column on Maryland's expensive estate tax, which starts:

The millionaires are fleeing Maryland, all right. But not because of the measly tax surcharge on income over $1 million.

They're bugging out because of Maryland's estate tax, which applies to a bigger portion of a dead person's hoard than the federal estate tax or those in other states.

Readers say:

My father never made a lot of money, but he lived long enough to see his 1946 purchase of a small farm and his investments in the stock market accumulate in value to more than a million dollars. We had to pay over $30,000 in estate taxes. I think it is time that someone sheds some light on the negative impact of high taxes in the State of Maryland and Baltimore City. People who accumulate money are spendthrifts: they are conscious of the value of a dollar. While an estate of slightly more than a million dollars may not be cause to relocate: an estate of two or three million dollars would be reason to give serious consideration to relocating to another jurisdiction.

And:

I would like to add that many middle income retirees flee Maryland after retirement. They move to states that do not tax or only tax a percentage of retirement income. You pay your state income taxes for 35, 40, 50 years and Maryland is still there to squeeze you until death. This also contributes to loss in state tax revenue.

And:

I'm too busy and too young (sort of!) to worry about estate taxes, but many sixty-something retirees are doing exactly what you described. As for state income taxes, I never thought my native state of "Taxachusetts" would seem like a tax haven relative to Maryland.

And:

It's not just milionaires that want to flee the Peoples Republic of Maryland. Add me to the list of those who wish to flee. I am not even close to being a milllionair. I have spent 60 of the last 62 years of my life in Marland and I have seen it degrade into a quasi-socialist state under the "fealess" leadership of the Democrats. Democrats who without any fear or sense of responsibility pass any tax law they choose. As a retiree it is cheaper for me to sell my house at a lose and move to Texas or Florida (to name a couple) for a lower cost of living, and lower taxes. And, as a side note, if some "fool" breaks into my house I can use whatever force is necessary to defend myself and my family, without first having to worry about if the cops will arrest me.

Posted by Jay Hancock at 9:56 AM | Permalink | Comments (7)
Categories: Taxes
        

The New York Times reports:

Gov. Arnold Schwarzenegger returned home from a White House visit on Wednesday to find the state dangerously broke, his constituents defiant after a special election on Tuesday and calls for a constitutional convention — six months ago little more than a wonkish whisper — a cacophony.

As the notion of California as ungovernable grows stronger than ever, Mr. Schwarzenegger, a Republican, has expressed support for a convention to address such things as the state’s arcane budget requirements and its process for proliferate ballot initiatives, both of which necessitated Tuesday’s statewide vote on budget matters approved months ago by state lawmakers.

H.L Mencken: "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

California's tendency to require statewide ballots on anything and everything is the latest evidence that direct, Athenian-style democracy may not be a great idea. The founders set up a system of representative democracy for a good reason.

Posted by Jay Hancock at 10:51 AM | Permalink | Comments (1)
Categories: Politics
        

Toyota Financial is offering a $1,000 rebate to recent grads of four-year and two-year colleges. Sounds great. No money down. Free roadside assistance for a year. Security-deposit waiver if you're leasing. Even if you graduated two years ago you still get the rebate. Good on all the non-hybrid models. Go for it! Except -- you knew this would happen -- read the fine print.

Show proof of present employment, or future employment with a start date within 120 days of your purchase contract date. TFS must deem your salary sufficient to cover living expenses and vehicle payments.

In this economy, that's a deal-killer. I know several people graduating from college. I know only one who will have a job.

UPDATE: To which wise commenter Pete adds the corollary:

But also a credit-saver. No sense in getting into a financial commitment you have no ability to live up to, and no sense taking on credit risks and bad debts. Calling it a deal-killer puts it in a negative light, as though we've learned nothing from the housing and financials meltdowns.

Posted by Jay Hancock at 10:40 AM | Permalink | Comments (3)
Categories: Marketing
        

To Wednesday's column, which said, "Economic growth is still the best prescription for human welfare," my friend and former Sun environmental columnist Tom Horton responds:

your column today is correct that growth serves us better than recession. but the real questions are how well does continued growth serve us--and might there be a better course than either growth or recession, such as a steady state, with relatively stable populations and an economy that develops, innovates, yadda yadda, without physical expansion.

what you're telling readers is rather like a nutritionist saying you gotta keep overeating or you'll starve, without ever considering a healthy diet--and yeah, getting down to your ideal weight's not gonna be fun.

we've grown the global economy about five fold in the last fifty years, a rate that will take us to 80 times the size of the current economy by 2100; and we've given nature and our environment about the same attention as your column, which is the obligatory sentence toward the end that says, and of course we've got to be mindful of the pollution we cause---it's how we've degraded more than half of all our natural systems, from forests to fish, and seriously impaired the Chesapeake.

we're in a potentially very teachable moment with the old economy more open to questioning and rethinking than at any point in my life, and you might do a bit more of that: talk to some of the ecological economists like bob costanza at u of vt (I think you interviewed herman daly some years back, a decent interview as I recall); also peter victor, a canadian economist who has written a good book Managing Without Growth, about Canada, but also pertinent to the U.S. it's Elsevier Press.

The fact is, growth isn't making us any happier...a sizeable body of literature on that (at least not in the developed world), and it's not solving poverty (the percent of people in poverty in the world has fallen, but because we're growing, more people than ever live on less than two bucks u.s. a day). And the myth that we can just grow smarter and have sustainability is not borne out by reality--Peter Victor has some very interesting stuff on how becoming more energy efficient doesn't seem to translate into using less energy (like doubling up portions when they come out with a low fat version of your favorite chips, I think).

Posted by Jay Hancock at 8:22 AM | Permalink | Comments (3)
Categories: Poverty & Wealth
        

It sounds like now KFC might have to give out rain checks for its rain checks to get a free grilled chicken meal. As you recall KFC and Oprah publicized a massive giveaway of the new sandwich. Millions tried to print out the Web coupon, running into immediate problems. The coupon software wouldn't work. The substitute PDF coupon wasn't honored by the KFC. The KFC ran out of grilled chicken sandwiches etc. Within hours the company said it would no longer take the Web coupons but would exchange them for rain checks that could be mailed in for NEW coupons that would be honored. Now a commenter says:

I went to a KFC and they said they are giving rainchecks but they don't have any rainchecks left! How lame is that?! That's it - that was my final visit to KFC!

Posted by Jay Hancock at 1:15 PM | Permalink | Comments (5)
Categories: Marketing
        

Don't get us wrong: Our nation's fiscal house is in about as much order as Tara after Sherman's march through Georgia. And, yes, the burden will fall to future generations if nothing is done (and, likely, even if reforms are enacted) but so will the benefit....

Intergenerational equity debates usually leave out the concept of intergenerational interdependence. Instead of just talking cuts - which some think need to be made - we also should talk about investing in children and young people... Some think that if we could cut entitlements for older Americans, tens - if not hundreds - of billions, in theory, could be reallocated to spending for children. But spending in Washington doesn't usually work that way. We don't take from Peter to pay Paul, when Peter wants to hold on to what he's got, Paul doesn't have powerful lobbyists, and some apostles of deficit reduction just want to cut government.

Our child policy needs to be more forward-looking and generous now; while we should reform entitlements, we shouldn't wait until that magical day when Social Security and Medicare have been transformed. So, we should reframe the discussion: Intergenerational equity is about sustainability, sharing resources, spending both humanely and with economic prudence, and providing the basics for Americans from birth to death.

This isn't about a "cradle to grave" welfare state or creating new kids' entitlements. It's about re-balancing - not only our allocation of resources between the elderly and children, the haves and the have-nots, but also our talk of "intergenerational equity" as more for children, not just less for those 65 and older. And, of course, Americans between 18 and 65 also have needs that we are not meeting.

Yarrow is the guy who wrote: "If we don't control entitlement spending, coupling it with modest tax broadening, the American people will be faced with a tab that will rise so rapidly that it will be like adding endless lobster thermidors or filet mignons to a restaurant bill faster than the waiter could retally the tab."

There is nothing he wrote in today's paper in today's Web edition of the paper that directly contradicts that. But talk of intergenerational re-balancing that doesn't also address the immediate need to restructure Medicare and health spending generally sounds like just another excuse to do nothing. The REAL rule of Washington is that it's easy to add government programs while it's hard to scale them back. We need to focus more on the second part.

Posted by Jay Hancock at 10:50 AM | Permalink | Comments (0)
Categories: Slo-mo fiscal train crash
        

My favorite columnist, Alex Beam of the Boston Globe, has struck upon a way for 21st century hacks and scribes to make money -- the way they always did, until 1700 or so. What worked for Catullus and Chaucer can work again, with a few minor amendments to journalistic ethics.

I want a patron, a fabulously wealthy rich man or woman, to subsidize my writing career for the next five years. In olden days, Greek poets produced fulsome odes, called panegyrics, celebrating the virtues of the men and occasionally women who paid their expenses. For example: "Great is thy wisdom and the bounty of thy loins, [YOUR NAME HERE]."

Once a year, I agree to attend a function at your mountain aerie in Vail or Telluride, or at your lakeside "inholding," tucked inside a vast, national park. You can show me off. "Here's my writer," you will say to your plutocrat pals, as if you were boasting of a freshly acquired Bugatti, or a rare ocelot stolen from a Third World nature preserve.

Third World, indeed.

Posted by Jay Hancock at 8:30 AM | Permalink | Comments (5)
        

UPDATE: Pulled from comments. Here is a piece of evidence suggesting that what the Times predicts (see below) is already happening.

I have been a customer of a particular card for 17 years. Last week I received a notice that they were lowering all sorts of fees and penalties that were never an issue for me since I paid in full each month. In return, they were now going to charge an annual fee. I was forced to canceled the card to avoid the fee. Once again, those who follow the rules and act responsibly will be forced to subsidize those who do not.

Story in the NYT on what may happen in the credit card business now that they can't soak borrowers with low credit scores quite as much as they used to. To a degree, credit-card customers like me who never miss a deadline and pay their balance in full each month have been subsidized by borrowers who don't. The companies were raking in so much money on 29 percent interest charges, late fees and all the other outrages that they didn't much mind low-profit "convenience users" like me. According to the Times, that may change.

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”

I'm skeptical. First of all, Yingling is not a credible source. He's the first guy the Times quotes, and he's a flack for the banks. It's his job to paint a dire picture of what will happen under credit-card reform and to try to sow class warfare between sloppy credit-card customers and punctilious credit-card customers. Second, as I wrote recently, the legislation doesn't do that much to keep card companies from making a mint off careless customers in the future.

Bills in the House and Senate would end the worst abuses but do little to stop stalker lending or cut the fine print.

We still have the problem of high interest rates" that aren't addressed in the bills, says Charles Shafer, a law professor at the University of Baltimore and president of the Maryland Consumer Rights Coalition. "We still have the problem of misleading disclosures and these teaser rates that lull people into thinking they can borrow a lot of money.

"We still have the problem of having lots of fees - annual fees, fees for late payments, fees for going over the limit, whatever."

Posted by Jay Hancock at 11:00 AM | Permalink | Comments (11)
Categories: Personal Finance
        

The father of a pilot for a regional airline writes regarding Saturday's column on the Flight 3407 tragedy and the experience and working conditions for commuter-air pilots, Low standards aren't likely to give a lift to regional fliers.

My daughter is Captain on a regional jet. You are correct the starting wage is miserable considering the cost of her education. She is a graduate of Embry-Riddle Aeronautical University. What you also have to consider is in the airlines everything is driven by seniority. You have to wait your turn. It took my daughter five years to get promoted to Captain. This doubled her wages. After five years as a First Officer, she was making about $28K. So there is no “quick increase” to the $50K mentioned in your write up. A beginning accountant starts at $40K without having to worry about million dollar equipment or people’s lives.

The recent change by the FAA allowing pilots to fly until 65 further delays upgrades to Captain for newer pilots. Then there are the reserve rules. Until a pilot can get a “line” which is a regular route, they fly reserve which is determined by where you are based and seniority. She has had to be on “hot reserve” many times. This means she has to sit at the airport in uniform for 10-12 hours uncase they need a pilot. She is basically not paid for this time believe it or not. I think she gets like $3.50/hour.

The eight hours of sleep between flights is calculated from when they get off their flight and when the next one begins. Some contract hotel facilities are 40 minutes away from the airport so at best they might get 5-6 hours sleep. All this is negotiated with the unions, however from my daughter’s perspective the union takes care of the older pilots, not the entry level members. Like many occupations it is considered doing your time. Then when and if she decides to jump from the regional airlines to the major airlines where the money is in the $100-180K range she can expect to take a 25-35% drop in pay the first year. Entry level pay for a first year First Officer is $35K for most major airlines. It does double the second year to the $70K but there is no reason for this other than “that’s the way it is.”

To conclude let your readers know that a lot of pilots are barely making a living and working long hours to do it. Will it change? I doubt it. My daughter would love to change jobs but in this economy she at least has something.

Posted by Jay Hancock at 8:28 AM | Permalink | Comments (4)
Categories: Airlines
        

The check was for $25.00, drawn on the Springfield (Illinois) Marine & Fire Insurance Co. Made out on Feb. 4, 1860. Signed: A. Lincoln. Sotheby's is selling more than two dozen of the slips of paper, which must have surfaced from some financial archive. (Also offered: a Shakespeare Fourth Folio, est. $150,000 - $200,000.) Estimated price for each cancelled check: $7,000- $10,000.

Posted by Jay Hancock at 11:53 AM | Permalink | Comments (0)
        

Robert Reich has a nice summary of what's at stake in the D.C. fiscal debates:

Don't be confused by these alarms from the Social Security and Medicare trustees. Social Security is a tiny problem. Medicare is a terrible one, but the problem is not really Medicare; it's quickly rising health-care costs. Look more closely and the real problem isn't even health-care costs; it's a system that pushes up costs by rewarding inefficiency, causing unbelievable waste, pushing over-medication, providing inadequate prevention, over-using emergency rooms because many uninsured people can't afford regular doctor checkups, and spending billions on advertising and marketing seeking to enroll healthy people and avoid sick ones.

Posted by Jay Hancock at 11:13 AM | Permalink | Comments (6)
Categories: Health Care
        

Reader James Smith asks a good question about Laura Smitherman's story last week, Maryland plan to tax millionaires backfires. It shouldn't be that hard, James says, to figure out how many previous Marylanders with a million in income moved out of the state vs. how many just saw their incomes go down.

I have a question about Laura's "Millionaire tax" story. You said that officials say there's no proof yet of millionaires packing up because of the excess tax. Wouldn't that be a very easy thing for the Comptroller's office to ascertain?

Just round up all of last year's tax returns from millionaires. There were only 3,000 right? Then look up this year's tax returns from every one of those people. It will be easy to divide the 2008 millionaires into 3 categories for 09:

Still millionaires, still paying Maryland tax No longer millionaires, still paying Maryland tax Return missing: no longer paying Maryland tax

How many people fall into that 3rd category? Subtract the number of people who died, and that (more or less) is your total of millionaires who have fled Maryland.

I'll ask comptroller Peter Franchot to get a breakdown.

Posted by Jay Hancock at 10:26 AM | Permalink | Comments (4)
Categories: Taxes
        

My college classmate Edmund Andrews, who covers the Fed for the New York Times, has written a brave, honest and surprising first-person account of how one of the top economics reporters in the country got himself into the position of defaulting on his mortgage and putting himself and his wife at risk of foreclosure.

There have been many stories about mortgage customers who made bad decisions, but few as unflinching as this one. When reporters interview mortgage "victims," aspects of the story are almost always left out. Exactly how much did the borrower make in income? How much did he/she spend on vacations and other discretionary items that could have gone to the mortgage payment? How bad were the fights with the spouse? Reporters, pressed by deadlines and grateful that unwise borrowers are willing to share any of their experience, are often reluctant to ask hard questions. When asked, interviewees often clam up.

Acting as both interviewer and interviewee, Andrews has gone into the gory details. He has written a book, Busted: Life Inside the Great Mortgage Meltdown, about his still-unfolding nightmare. The book is excerpted in this Sunday's Times magazine. You can advance-order it on Amazon. It sounds like he could use the dough.

But in 2004, I joined millions of otherwise-sane Americans in what we now know was a catastrophic binge on overpriced real estate and reckless mortgages. Nobody duped or hypnotized me. Like so many others — borrowers, lenders and the Wall Street dealmakers behind them — I just thought I could beat the odds. We all had our reasons. The brokers and dealmakers were scoring huge commissions. Ordinary homebuyers were stretching to get into first houses, or bigger houses, or better neighborhoods. Some were greedy, some were desperate and some were deceived.

As for me, I had two utterly compelling reasons for taking the plunge: the money was there, and I was in love.

Posted by Jay Hancock at 9:40 AM | Permalink | Comments (3)
Categories: The Great Recession
        

Andrew Mickey of Seeking Alpha says:

Throughout the first eight weeks of this (stock and energy) rally, natural gas prices seemed to fall week after week. Inventory continued to set new highs practically each week. Every round of price declines brought a further decline in natural gas rigs in operation. Last week another 17 rigs were taken off line, according to Baker Hughes (NYSE:BHI).

That all changed last week and natural gas prices started to rebound. In all, natural gas prices rebounded sharply from a bit under $3.25 per Mcf to $4.52 as I write. That’s a 40% move in a little over a week.

So now the big question on investors’ minds is, “Was that the bottom?”

If natural gas prices are permanently headed up (I'm skeptical), the Public Service Commission's inquiry into how BGE and other utilities will protect consumers against increases is relevant. But if gas prices have taken off, the PSC proceeding is also too late. BGE's standard monthly gas price for residential users has plunged from $1.05 per therm in December to 53 cents in May. .

Posted by Jay Hancock at 10:21 AM | Permalink | Comments (1)
Categories: BGE/electricity
        

L. William Seidman, who was head of the FDIC and Resolution Trust Corp. during the S&L crisis, died Wednesday. Here is one of the last things he wrote, for Bank Director magazine (free registration required), pondering the implications of Fed Chairman Bernanke's extraordinary Wall Street bailout. As someone who presided over a successful bailout, he knew that saving and/or dispatching ailing lenders is only the beginning of the process.

But what about the possibility of a major inflationary bubble caused by all the money (credit) created to carry out these intervention policies? The chairman has repeatedly said that most of the new credit is short term and can be reduced quickly if need be to diminish the inflationary threat. He may be right, but that depends on the Fed's willingness to withdraw its support-not a popular decision. Furthermore, inflation does not depend only on the Fed. The U.S. government is running a trillion-dollar deficit, which is clearly inflationary in the long run.

While Fed action is important, the greatest threat of inflation comes from the failure of the government to get the deficit under control in the near term. It's much easier politically to push a stimulus program (a shot of dope) than it is to cut government spending. When the system needs to cut expenditures to avoid inflation (detox), the many who have been enjoying the benefit of government largess will fight very hard to slow reducing expenditures.

Posted by Jay Hancock at 8:30 AM | Permalink | Comments (0)
Categories: The Great Recession
        

Ticketmaster does it again. In February the quasi-monopoly botched sales for Bruce Springsteen's current tour and sent fans to Ticketmaster's TicketsNow.com scalper site, where they had to buy seats at huge markups. Now, AP reports, TicketsNow says it sold too many tickets for the Springsteen show at DC's Verizon Center on Monday. The company has been calling fans who thought they locked up seats at hundreds of dollars to tell them the bad news. TicketsNow says it will give people refunds along with free tickets in the nosebleed section.

But I doubt they're happy. Baltimore resident Joe Compton said he got locked out of buying Springsteen seats at face value from Ticketmaster in early February. So he went to TicketsNow, he says, paid $440 for two tickets plus another $80 in nuisance charges and was told the tix would be mailed in early May. They never came

"On Friday they called, leave me a message," he told me on the phone. " 'Contact us.' I've called Friday, Monday, Tuesday and Wednesday. They have not gotten back to me. I go and look on my TicketsNow account. It says 'the order is complete'.... They've kept 520 of my bucks for three months and I don't think I'm getting the deal."

He's feeling doubly abused and very ticked off. Good thing Ticketmaster doesn't do anything important, like fly planes or run nuclear energy plants. Dear Justice Department and FTC: Don't let Ticketmaster merge with Live Nation!

Here is February's Hancock column on the Ticketmaster/Springsteen debacle:

'Boss' furor shakes Ticketmaster's reign

Date: Saturday, February 7, 2009
Byline: JAY HANCOCK

Lettie Holman swears on Bruce Springsteen's soul patch that Ticketmaster automatically kicked her over to its high-priced TicketsNow scalper site when she was trying this week to buy seats for The Boss' tour stop at Washington's Verizon Center.

Ticketmaster says she and others who make similar claims are misremembering or lying.So it is that, even before it starts, Springsteen's newest tour has become a public relations disaster for him and America's best-loved concert-ticket monopoly.

Springsteen is "furious" at Ticketmaster, he said in a prepared statement. Ticketmaster denies forcing Internet buyers to TicketsNow, where one is helpfully offered seats at $500 a pop, and says problems experienced by Springsteen fans have been exaggerated.

A New Jersey congressman is demanding an investigation. New Jersey's attorney general has asked Ticketmaster to stop doing what it says it didn't do.

Ticketmaster is scrambling, overnighting free tickets to aggrieved Springsteen fans, compensating people who mistakenly bought marked-up seats on TicketsNow and doing its best to imitate a caring, progressive mega-corporation.

"We sincerely apologize to Bruce, his organization and, above all, his fans," wrote Ticketmaster boss Irving Azoff.

Because he's worried about losing future business from rock fans and impresarios?

Heck no. Ticketmaster owns 70 percent of the concert-ticket market, estimates Scott W. Devitt, who follows the company's stock for Stifel Nicolaus. There's really nowhere else to go, Ticketmaster's notorious "convenience charges" notwithstanding.

Azoff, who grew to fame and riches managing Dan Fogelberg and the Eagles, is probably more concerned about what the Springsteen debacle spells for Ticketmaster's reported merger plans with concert promoter Live Nation.

That deal would make Ticketmaster even bigger and more powerful, which is hard to imagine. Given that the administration of President Barack Obama was already likely to frown on such a combo, the Springsteen episode couldn't have come at a worse time for the company.

It began at the Super Bowl. Springsteen's Sunday halftime show was a glorified ad for his tour. Tickets went on sale at 10 a.m. the next day.

Jonathan Kandell of Catonsville, attendee of 54 Bruce shows, wanted seats for the Verizon Center on May 18. But as Boss Hour struck he couldn't complete the purchase. Then he tried searching for Springsteen seats in Philadelphia. That was when, he said, Ticketmaster's software automatically sent him to TicketsNow.

He couldn't believe it. It was only a few minutes after 10, but TicketsNow was already selling hundreds of Springsteen tickets for three or eight times face value.

"I was really upset," Kandell says. "Is this some sort of fraud or monopoly? I don't know."

Ticketmaster owns TicketsNow, which is why Holman, of Silver Spring, thought something was fishy when she had the same experience.

"It feels like Ticketmaster is hoarding and saving seats in the venue that are going to TicketsNow," said the 100-show veteran. "We're not getting access to the seats."

Ticketmaster spokesman Albert Lopez acknowledges there were software problems Monday - but only for people trying to buy tickets for shows in New Jersey and on New York's Long Island.

All those fans were contacted by phone or e-mail and provided seats, he said.

The rest of Monday's frustration, Lopez said, resulted from high demand for Springsteen tickets and the fact that they quickly sold out, not from anything Ticketmaster did.

While Ticketmaster offered an optional TicketsNow button for Springsteen buyers, he said, nobody was automatically sent to the site.

"There is no automatic redirect," Lopez said. "A fan has to physically click the button."

"It happened automatically without me touching a damn thing," said Holman.

I talked to three other customers, including Kandell, who said they had the same experience.

Why was Ticketmaster even allowed to buy TicketsNow last year?

Lopez says Ticketmaster doesn't own the tickets sold on TicketsNow. They're put up by individuals and licensed brokers, some of whom could have already had seats to sell early Monday, he said. Ticketmaster will no longer provide optional links to TicketsNow, it says, unless performers allow it.

But both companies under the same roof is still a breathtaking conflict of interest, subject to little oversight. TicketsNow is one of Ticketmaster's fastest-growing units.

The Internet has been unkind to many media and entertainment businesses, but Ticketmaster is an exception. In a parallel universe it might have been regulated as a natural monopoly like electricity. But even electric companies aren't much regulated these days.

Years after the band Pearl Jam complained about Ticketmaster before a star-struck congressional subcommittee, the company reigns supreme. This isn't 1991, however, when the George H.W. Bush government approved its buyout of rival Ticketron and helped create today's mess.

Springsteen has come out against a Ticketmaster-Live Nation merger, which is a start at fighting back. A Ticketmaster boycott by Springsteen would be better.

Real competition in ticket distribution would be the best deal of all. Barring that, a Federal Trade Commission inquiry into Monday's problems might ensure that we're not still reading Ticketmaster horror stories when Miley Cyrus has her comeback tour.

Posted by Jay Hancock at 4:06 PM | Permalink | Comments (4)
Categories: Ticketmaster
        

Barry Ritholtz asks a great question: Why does anybody still bother to quote what Greenspan says? Your eccentric uncle who builds pagodas out of used bubblegum would have as much credibility as the Maestro about the housing market and the financial crisis, but he never gets quoted. Successful economic forecasting was not a skill Greenspan possessed even before he was disgraced by the housing meltdown. Back when he was a consultant in the 1970s and early 1980s, his projections were notoriously unreliable.

“We are finally beginning to see the seeds of a bottoming [in the housing industry. The U.S. is] at the edge of a major liquidation [in the stock of unsold properties, which may help to stabilize prices]. —Alan Greenspan, May 12 2009

“I don’t know, but I think the worst of this may well be over.”
—Alan Greenspan, October 2006

Why does the public — and the Press — constantly seek out reassurances from the same people who misled them time and again in the past?

That was the question on my mind as I pondered yet another declaration from Alan Greenspan that the Housing Market has bottomed. That he has consistently made similar such statements before is cause for doubting him here. That these prior bottom calls were as far back as 2006 is cause for ridicule.

Few people have been worse than Greenspan in analyzing the Housing market. In fact, the only person / group I can think of with a consistently worse track record than Greenspan’s of analyzing the housing market was the group he spun his foolishness to yesterday: The National Association of Realtors.

Posted by Jay Hancock at 12:42 PM | Permalink | Comments (4)
Categories: The Great Recession
        

Remind me never to fly any air carriers attached to any of the following names:

Welcome Aboard! Colgan Air operates as Continental Connection, United Express and US Airways Express, offering daily scheduled service to 53 cities in 15 states & Canada. Colgan Air provides world-class customer service to its passengers and offers exciting opportunities for employment. Pinnacle Airlines Corp., a publicly traded holding company, is the parent company of Pinnacle Airlines, Inc. and Colgan Air, Inc.

Co-pilot Rebecca Shaw on the cockpit recorder just before she and her captain crashed Continental Flight 3407 and killed themselves and 49 passengers.

I've never seen icing conditions. I've never deiced. I've never seen any— I've never experienced any of that. I don't want to have to experience that and make those kinds of calls. you know I'dve freaked out. I'dve have like seen this much ice and thought oh my gosh we were going to crash.

And the Buffalo News reports:

Capt. Marvin Renslow did the exact opposite of what he should have done trying to pull out of a fatal stall that led to the crash of Colgan Flight 3407, the chief test pilot for the Bombardier Q-400 testified this afternoon.

"That's the most I've seen … most ice I've seen on the leading edges in a long time," Renslow said [on the cockpit voice recorder].

A minute later, Renslow noted that he was hired by Colgan Air, which operated the flight, with just 625 hours of flying experience.

"That's not much for uh back when you got hired," Renslow said.

The plane's "stick shaker," a stall warning device, activated at 10:16 p.m. for nearly seven seconds. During that time, the safety board said, Renslow inappropriately pulled back on the plane's yoke, pushing its nose upward. That altered the airflow over the wings and sent the plane tumbling.

Posted by Jay Hancock at 8:23 AM | Permalink | Comments (2)
        

UPDATE: No announcements planned today from First Mariner, says CEO Ed Hale.
"I got a call from Nasdaq this morning" asking if he knew why the volume and price were going crazy. "I have absolutely no idea why this is happening."

Stock in First Mariner Bancorp soared as high as $4.50 today on monster volume. In March it was bumping around 50 cents. At the moment it's around $2.70, up nearly a dollar on the day. FMAR, which got hit badly by ill-advised mortgage loans two years ago and has been struggling since, has been trying to raise capital in a variety of ways: TARP bailout money, selling off its consumer loan unit or getting a private-placement investment. To date none of those things has been announced. I put a call into the bank. Will report back if they say anything.

Posted by Jay Hancock at 1:29 PM | Permalink | Comments (0)
        

The price of a first-class stamp for a one-ounce letter hit 44 cents this week, up from the 42-cent mark reached just a year ago. Over the long and short runs, postage costs have increased substantially faster than general prices. In the last 40 years, the cost of a stamp rose at an average annual rate of 5.1 percent, whereas inflation was only 4.5 percent a year, on average.

In the last eight years stamp prices rose at an annual average rate of 3.3 percent. Inflation over the same period was only 2.3 percent per year, on average. If USPS costs had been limited to the increase in the consumer price index since 1969, a stamp today would cost 35 cents, not 44 cents. Still, says the Associated Press:

Even so, the rate increase is unlikely to cover the ongoing losses and the possibility remains that the post office could run out of money before the end of the fiscal year.

The post office could have cited extraordinary circumstances and asked the independent Postal Regulatory Commission for larger increases, but officials worried that would only result in a greater decline in mail volume and worse losses.

Posted by Jay Hancock at 8:00 AM | Permalink | Comments (0)
Categories: Inflation/Deflation
        

Scott Rick (Wharton), Deborah A. Small (Wharton) and Eli Finkel (Northwestern) report:

Although much research finds that "birds of a feather flock together," surveys of married adults suggest that opposites attract when it comes to emotional reactions toward spending. That is, "tightwads," who generally spend less than they would ideally like to spend, and "spendthrifts," who generally spend more than they would ideally like to spend, tend to marry each other, consistent with the notion that people are attracted to mates who possess characteristics dissimilar to those they deplore in themselves (Klohnen and Mendelsohn 1998). In spite of this complementary attraction, spendthrift/tightwad differences within a marriage predict conflict over finances, which in turn predict diminished marital well-being. These findings underscore the importance of studying the relationships between money, consumption, and happiness at an interpersonal level.

Thanks to Marginal Revolution

Posted by Jay Hancock at 2:53 PM | Permalink | Comments (0)
Categories: Personal Finance
        

Merrill Lynch economist David Rosenberg, one of the best in the business, left the firm last week in the wake of its acquisition by Bank of America. He posted one last commentary on Thursday, and, typical of Rosenberg the past few years, it's not very optimistic. Henry Blodget has some Rosenberg prose:

This is a bear market rally that may have run its course. The investing public is still holding tightly to their long-term resolve, but much of the buying power at the institutional level seems to have largely run its course, in our view. That leaves us with the opinion, as tenuous as it seems in the face of this market melt-up, that this is indeed a bear market rally and one that may well have run its course. We have “round-tripped” from the beginning of the year and there is real excitement in the air about how these last nine weeks represent evidence that the economy will begin expanding sometime in the second half of the year.

Growth pickup will likely prove transitory While it is likely that headline GDP will improve as inventory withdrawal subsides and fiscal policy stimulus kicks in, our view is that whatever growth pickup we will see will prove to be as transitory as it was in 2002, when under similar conditions the market ultimately succumbed to a very disappointing limping post-recession recovery. So yes, there may well be some improvement in the GDP data, but it is based largely on transitory factors. We strongly believe it is premature to totally rule out the end of the vicious cycle of real estate deflation – residential and now commercial – that we have been experiencing since 2007. Balance sheet compression in the household sector will continue to pressure the personal savings rate higher at the expense of discretionary consumer spending. This is a secular development, meaning that we expect it will last several more years.

Chances of a re-test of the March lows are non-trivial. To reiterate, it seems to us likely that the risk in the market is actually higher today than it was back at the same price points in early January,

Posted by Jay Hancock at 1:39 PM | Permalink | Comments (1)
Categories: Personal Finance
        

Noon today: WYPR with Rodricks, (88.1-FM) talking about the Treasury Department's stress tests for top banks that got released last week. Are they as promising as they seem?

Posted by Jay Hancock at 9:52 AM | Permalink | Comments (0)
Categories: The Great Recession
        

Another monthly plunge in wholesale inventories looks at first blush like bad news. Producers are selling less stuff, so their warehouses are emptier. Actually it's good news, and this morning's 100-point pop in the Dow probably has as much to do with the inventory report as with the terrible but not--totally-doomsday jobs report.

Inventory overhang -- too many goods for too few buyers -- is the traditional fuel for recession. When manufacturers have more stuff than they can sell they shut down and lay people off, which sends ripples across the economy. Just look at the housing market. Inventory is problem No. 1. Too big a supply is the cause of declining home prices and a depression among homebuilders. Inventory reduction in the goods market means producers will be more likely to crank up production and hire people when demand picks back up.

Posted by Jay Hancock at 12:02 PM | Permalink | Comments (0)
Categories: The Great Recession
        

Piling on after the debacle over KFC's free chicken offer promoted on Oprah, El Pollo Loco (for Md. readers, a western chicken chain) disses KFC for not honoring the Oprah coupons on Mother's Day. From Nation's Restaurant News:

COSTA MESA, Calif. (May 7, 2009) Continuing to peck away at a rival brand’s grilled chicken promotion, El Pollo Loco on Thursday posted a viral video suggesting that KFC doesn’t honor mothers because a coupon for a free meal is not valid on Mother’s Day this Sunday.

Saying that El Pollo Loco “loves mothers and families,” the 418-unit chain on Mother’s Day will honor the KFC coupon offer of a free two-piece grilled chicken meal with sides, which was promoted Tuesday by television talk show host Oprah Winfrey.

The coupon was available for download on KFC’s website until midnight Wednesday and the giveaway reportedly prompted a run on chicken. KFC stores across the country reportedly had long lines and some ran short on supplies.

The KFC coupon is good through May 19 — excluding Mother’s Day, when El Pollo Loco hopes to pick up some of the 5,200-unit chain’s freebie-seeking customers.

Actually, the KFC coupon isn't good on Mother's Day or any other day. The chain got so swamped with requests that yesterday it stopped direct use of all the coupons. Now you have to go to the store, present your coupon, fill out a "rain check" form and wait for them to send you ANOTHER coupon in the mail.

Posted by Jay Hancock at 11:39 AM | Permalink | Comments (1)
Categories: Marketing
        

UPDATE, THURSDAY NIGHT. So much for that little promotion. What a disaster. FROM KFC's WEB SITE:

We are so sorry, but due to the overwhelming response to our FREE Kentucky Grilled Chicken™ meal coupon, we can no longer redeem the free coupon at this time. But we will honor our commitment to giving you a free Kentucky Grilled Chicken meal.

Please visit a participating KFC restaurant for a rain check form. Complete the form, attach your original coupon , and give it to the KFC restaurant manager or postmark per the form’s instructions, by May 19, 2009, and we’ll send you a rain check for your free Kentucky Grilled Chicken meal at a later date, plus a free Pepsi with our compliments. Your participating KFC restaurant will provide you with the form you need.

Please note that the redemption periods of the rain checks will vary. All other terms and conditions of the original free Kentucky Grilled Chicken coupon will apply.

UPDATE, THURSDAY 4:45 PM. This just in from AP:

LOUISVILLE, Ky. (AP) — KFC has learned not to underestimate the power of Oprah Winfrey.

A free grilled-chicken meal promotion touted by the talk show host has caused such a frenzy that some stores ran out and the Louisville-based chicken chain is asking customers to take a rain check for the new product.

KFC President Roger Eaton said Thursday the company will mail coupons to customers in stages so people can enjoy their meal in a more relaxed setting. It will throw in a free soft drink to sweeten the new deal.

UPDATE, THURSDAY AFTERNOON: Just put another call into KFC public relations, with questions about whether the "1234" pdf coupons are good, whether the coupons need to be printed in color, and how they're going to respond to people who had problems. Several commenters have said that the 1234 coupons have been rejected at some stores or that other stores rejected coupons that weren't printed in color. The PR folks are still hunkered down and figuring out what to do. They do seem to realize they have a publicity storm on their hands. "They've been in meetings since 8 this morning," said the woman who answered the phone.

Will report back if KFC responds with answers.

Louisville, we have a problem. A commenter says:

Unfortunately for those who worked on or near 42nd St., in NYC are not able to use the coupons. A KFC employee was literally screaming in front of the KFC stating, "NO MORE COUPONS" and turned people away. Thanks for nothing!!!!

And another:

I went to use my coupon today and there was a notice on the door stating that if your last 4 numbers in the bar code are 1234, the coupon is no good! Came home to try to print again and the site would not let me print another coupon.

Jay here. ALL the pdf versions of the coupons (see post below) have the 1234 UPC number. I have a call into KFC public relations about this and about whether they're going to be swamped by all the demand. Will report back when I hear.

UPDATE: More reports of KFC customers unable to redeem grilled chicken coupons. Metro New York customers do not seem to be having good KFC experiences today:

If the coupon doesn't print, consider it a blessing! the portchestoer NY store sort of honored a few before noon (2 wings, mash & no biscuit) and then told the remaining coupon holders (that were shunned into a separate line) that the chicken was gone. I eat atr this KFC regularly and was treated like a vagrant because I had a coupon; that they issued!

And:

well we went to kfc in brooklyn center off brooklyn blvd and they also said that if any of us had the same numbers they weren't going to take them.everyones coupons end with 1234'so we went to another one got served went back and talked with the 1st place.they were only serving one per car.

And:

I just came back from the North Lake KFC in Pasadena California, where the sign on the door read "We are not accepting internet coupons".

UPUPDATE: Scott in San Antonio says he & friends successfully redeemed PDF-based coupons. Since he says all coupons' barcodes were the same, I assume they all ended in 1234, which seems to be all you get from the PDF version.

I was able to print it no problem with FireFox. I also saved the PDF. Others who went to get it got the same coupon code. We all went to lunch together and joined the long line of other people waiting for their free chicken. We were politely served and while it took about 10 minutes for our food to be ready, we did get it and in no way felt slighted.

I guess I know what I will be eating for the next two weeks! :)

(BTW, this was in San Antonio)

AND MORE: A reported sit-in over grilled-chicken denials at a New York KFC.

Check out frustrations other customers are having on the Consuming Interests blog.

Posted by Jay Hancock at 2:27 PM | Permalink | Comments (468)
Categories: Marketing
        

The coupon for KFC chicken prompts you to download some software before you print it out, which would be a minor obstacle to free chicken if the software worked. However people are reporting problems.

UPDATE: Here is a link to a PDF coupon that you can print without downloading the software required for the other method. It appears to be legitimate. For the KFC free grilled chicken meal coupon, click here.

Commenter Dawn sez:

I tried to print out the Oprah free KFC giveaway coupon and it want allow it to be print from my printer. I installed all of the software that the coupon assisted on me to do. Ran software, still will not print coupon.

Commenter Bob sez:

No amount of trying resulted in coupon being printed. Computer got hung up as well. Geez Louize ---what kind of promotion is this?

Commenter Jesi says:

I tried printing from several computers....It WONT print! So this is how they get away with such a promotion...No one can actually download the coupon. This is annoying

Commenter Henry:

O.K. What is going on? I tried to print out the coupon and it would not let me. A security system thing keep popping up and it won't let me get in nor, will it let me print the conpon. Could someone explain? Thank you.

Has anybody successfully downloaded coupons?

Posted by Jay Hancock at 12:37 PM | Permalink | Comments (59)
Categories: Marketing
        

KMT sez:

So we made the switch to WGES for natural gas and electricity. Now what - do you know if we have to cancel anything with BGE? I certainly don't want to pay double! Thanks.

The answer is no. WGES or any other supplier will let BGE know that you switched, and you don't need to call BGE. No risk of paying double. I just switched to WGES. First I got a letter from WGES confirming the change. Then I got a letter from BGE acknowledging the swtich.

Posted by Jay Hancock at 11:41 AM | Permalink | Comments (2)
Categories: BGE/electricity
        

History is replete with examples of companies that offered giveaway or discount promotions only to have them become a bit too successful. The idea is to get publicity and drive traffic without hurting your bottom line too badly. But KFC's loss leader might just turn into a big loss.

The Oprah connection is generating huge publicity. "Kentucky fried chicken coupons" is No. 11 on Google trends this morning. It's also interesting that, amid KFC's campaign to "Unthink What You Thought About KFC," the company is promoting the meal that the Colonel has been serving for 50 years. You can dowload a coupon for a free two-piece chicken meal, sides and a biscuit until midnight eastern time today.

No matter the ultimate cost or volume, the true test will be whether the promotion sustainably pulls KFC out of the lagging ranks of fast food chains.

UPDATE: As pointed out by commenter Doc, it's KFC's new grilled chicken, not the traditional fried stuff. This would have been obvious to me had I closely read the coupon terms I posted below!

UPUPDATE: KFC is getting flooded with attempted coupon redemptions today as well as questions about how to print them. Some other posts:

Would-be KFC diners have trouble printing coupons
KFC customers report they can't redeem coupons
Coupons good till May 19th (The Sun's Consuming Interests blog)

* Terms: Free offer good for two pieces of Kentucky Grilled Chicken™ (manager's choice) and two individual sides and a biscuit at participating KFC restaurants located in the Unites States, while supplies last. Limit one offer per coupon, one coupon per person during offer period. Must be redeemed in person. Not good with any other offers. No photocopied, mechanically reproduced or altered coupon accepted. Coupon cannot be sold or traded. Valid only if downloaded from UnthinKFC.com. Applicable tax extra. Void where prohibited. By downloading coupon, you agree that KFC is not responsible for any technical problems or malfunctions of computer systems, servers or printers or lost or unavailable network connections. You are limited to 4 downloads of coupon. Coupon fraud is punishable by law.

Posted by Jay Hancock at 11:21 AM | Permalink | Comments (90)
Categories: Marketing
        

In the future all journalism will consist solely of lists. No sentences. No paragraphs. Just the logical culmination of the insight David Wallechinsky and Amy Wallace (The Book of Lists) had in the 1970s: People love lists. They love rankings. They love fake quantification. Forbes is well along this path (Forbes 400 richest people) also pioneered by U.S. News and Fortune.

So Forbes can now tell us that Columbia is No. 7 (not No. 6!) on the list of America's Top 25 Towns to Live Well (in) for entrepreneurs. The magazine

... evaluated areas of the country with less than 100,000 people. Due to differing regional definitions, we used the label "town" for any city, township, borough or Census-designated place with such populations. Characteristics like the number of museums, parks, bars and restaurants, and cultural institutions per capita were considered, as were factors indicative of a favorable business environment. These include patents, venture capital funding, sole-proprietorships, start-ups and small businesses per capita.

No. 1 was Boulder. Also making it are Silver Spring, Potomac, Germantown and Rockville. Guess the tax-hating Forbes temporarily forgot about Maryland's relatively high personal income taxes, which hit entrepreneurs especially hard since their companies are often S-corps. S-corps pass tax liablity straight to individual shareholders rather than having profits taxed as retained earnings at the lower, corporate rate.

Posted by Jay Hancock at 1:58 PM | Permalink | Comments (1)
        

I love the fiction maintained by the wire services that the bank stress tests are only for a really, really bad recession. Reuters is typical:

The banks have been negotiating with their regulators about the depth of their capital needs, should the recession prove to be deeper and longer than anticipated. Markets have been anxiously anticipating the results, which will differentiate the strongest banks from those still expected to sustain considerable credit losses.

We're already in a really bad recession. The stress tests are testing for current conditions. On the other hand, if markets were truly anxious, the S&P 500 wouldn't be over 9,000.

Posted by Jay Hancock at 10:24 AM | Permalink | Comments (0)
Categories: The Great Recession
        

The 82-year old winner of the $144 million Powerball lottery jackpot shunned the press conference and sent his lawyer intstead. From today's WP:

Helium-filled balloons bobbed in the air at the Frank D. Reeves Center on U Street NW. Icing on a sheet cake exclaimed: CONGRATULATIONS TO THE D.C. LOTTERY'S $144 MILLION POWERBALL JACKPOT WINNER! Gift bags were filled with small favors, all with the lottery's logo.

But the winner kept his distance. He dispatched his attorney instead, choosing to remain out of the public eye.

The attorney, David Wilmot, did little to enlighten things. He offered a thumbnail sketch of the winner, an 82-year-old widower from Southeast Washington with 10 children and 47 grandchildren and great-grandchildren. He is a lifelong District resident who "works in his community," Wilmot said.

In addition, Wilmot said, the winner hoped to be able to maintain his privacy, keep from being overwhelmed by publicity and go on with a normal life. "He wants to remain anonymous," Wilmot said. "I have to respect his wishes about privacy."

I don't know why every lottery winner doesn't do this. This guy set up a limited liability corporation, named Wilmot as the agent and never has to see his name in the papers. He can sit back and dispose of his money the way he likes. He'll be free of wheedling friends, lamprey relatives and importuning strangers. If he can keep his mouth shut and disguise the Lamborghini in the driveway, that is.

Posted by Jay Hancock at 10:02 AM | Permalink | Comments (3)
Categories: Personal Finance
        

I'm attending the 1st Mariner annual meeting today, scheduled for 7 a.m. I'll let you know if anybody besides the board and the accountants shows up.

Posted by Jay Hancock at 6:13 AM | Permalink | Comments (1)
        

I missed this last week amidst all the turmoil. The Labor Department's employment cost index showed the smallest increase on record for the private sector, adding statistical evidence to bolster a column I wrote a month ago on falling wages. Here is part of Krugman's column today on the results:

It’s true that many workers are still getting pay increases. But there are enough pay cuts out there that, according to the Bureau of Labor Statistics, the average cost of employing workers in the private sector rose only two-tenths of a percent in the first quarter of this year — the lowest increase on record. Since the job market is still getting worse, it wouldn’t be at all surprising if overall wages started falling later this year.

Here is the beginning of last month's column:

Bosses at Avatech Solutions thought they had to slash payroll after sales cratered, but when it came down to it they didn't want to lay off 35 or 40 people. So the Owings Mills company let half that many go and achieved the balance of the savings with a kind of cost-cutting not widely seen since the Great Depression: a pay cut for all remaining employees.

Many facets make this downturn unsettling and different: the collapse of Wall Street, the taxpayer dollars laid on the line, the depth of employment loss - underscored by Friday's report that in March the economy shed 663,000 more jobs.

Add another. Thousands of employees who have managed to hang onto their jobs are nevertheless seeing living standards and buying power decline with substantial, if maybe only temporary, wage decreases.

Posted by Jay Hancock at 11:41 AM | Permalink | Comments (2)
Categories: The Great Recession
        

Saturday's column was on the enormous sums society spends on medical care for seniors who are only months away from death. President Obama raised the subject in an interview with the New York Times over the weekend by mentioning his grandmother, who received a hip transplant last year after she had already been diagnosed with terminal cancer.

Here's reader Larry's idea: Let terminal patients decline additional care in return for payments by the government to their heirs.

If I had 3 months to live and had a choice of :

1. have a hip replacement
2. not have a hip replacement, but have the federal government offer a small percentage of the cost to my heirs

I would choose #2. It would save taxpayers money and give a last small token of love to my
heirs.

Great idea to save $$$$? Or terrible policy that puts a price on life and pressures old people to die? My take is that it would never work because it implicitly falsifies the notion that end-of-life care is necessary at all costs. That notion is at the heart of a very profitable industry.

Posted by Jay Hancock at 10:53 AM | Permalink | Comments (5)
Categories: Health Care
        

There appears to be no evidence of humans contracting swine flu from pigs. But the swine are getting it from us. From the NYT:

The news from Canada changes things. But it has a somewhat unexpected twist: a person appears to have spread the disease to the pigs, and not the other way around. A worker at the farm had traveled to Mexico, fallen ill there and unknowingly brought the disease back to Canada last month. The worker has recovered.

About 10 percent of the 2,200 pigs on the farm got sick. According to the Canadian Food Inspection Agency, all recovered without treatment in five days.

Posted by Jay Hancock at 1:24 PM | Permalink | Comments (0)
Categories: Health Care
        

The House passed its version of credit card reform. From AP:

WASHINGTON (AP) — Propelled through the House by antibusiness sentiment in tough economic times, legislation putting new reins on the credit card industry now goes to the Senate, where the bill's prospects appear promising.

The legislation, which has President Barack Obama's backing, would eliminate abrupt increases in interest rates and other practices decried by consumer advocates. It could be taken up in the Senate as early as next week.

Wednesday's column tells why it's not enough:

The liberal case for credit-card reform is well known: Greedy banks victimize card users with high interest rates and outrageous fees; Congress must crack down to make the system fair.

Here is the less-known, conservative argument: Credit card complexity prevents users from making rational decisions about borrowing and spending, thus hurting the economy; Congress must intervene to make the system understandable.

Unfortunately, Congress might not take either course. Bills in the House and Senate would end the worst abuses but do little to stop stalker lending or cut the fine print.

Posted by Jay Hancock at 9:58 AM | Permalink | Comments (5)
Categories: Personal Finance