On June 30th, Dennis Kneale of CNBC formally announced the end of the recession. He referenced a few charts that supported his opinion and also something called a “gut feel(ing)” as proof the recession has ended. That’s all fine and dandy, I might go after someone like this for citing circumstantial evidence and making a dramatic call from it, but I might not. But then he started calling out bloggers, specifically anonymous bloggers, going so far as to call some of them “dickweeds”. Don’t let the suit fool you, this guy is no professional. The video is at the bottom of this post.

It got me thinking about how much I hate people that are paid of their opinions like Kneale. I don’t have a specific beef with all of them, it’s a desirable job, but I do have problems when these personalities are surprised that some people don’t like them. So here’s a quick note for Dennis Kneale:

Here’s the difference between you and people like me. You’re paid to give your opinion, I’m not. Like anyone compensated for their services your internal motivation must be questioned. For most of us that doesn’t matter because our only motivation is to get paid in our day jobs. However those of you paid for your opinion like yourself, Paul Krugman, and Bill O’Rielly, YOUR motivation is money and your opinion should be questioned. What is it that motivates bloggers to offer their opinion? We do it because we care. We want to share information and opinion to gain a greater understanding of the world. We aren’t paid for our opinions. We bust our asses 40+ hours a week doing unrelated jobs and can maybe devote a few hours to sharing our opinions of the world around us. A true dickweed is someone who gets paid for their opinions and attacks someone who doesn’t.

What did you do on June 30th? You met with your production staff and planned a show. You met with data experts who got all the supporting data you’d need for you. You met with writers who planned exactly what you would say and when you would say it. Then you met with graphic artists who created the pretty charts to distract your viewers from your pathetic rambling. Finally you practiced everything until it felt good.

What I did on June 30th reflects why bloggers don’t want to come on your show, they’re too busy. That was the end of the quarter for those of us that actually work in finance. I compiled reports, made a dozen phone calls, and sent 3 dozen emails. All the while I’m trying to plan a wedding and take care of some other personal things. I stayed late because I didn’t get all my work done. I went home and worked out for a grand total of 30 minutes while watching Niall Ferguson’s Ascent of Money Series preview. After dinner I was too mentally exhausted to put together a post so used a guest post I’d been saving for such a day. By the time I was done loading the post and read a blog for 30 minutes it was bed time.

The bloggers you called out live similar lives to mine. Most of them probably have kids too, further eating into their time. By coming on your show they’re giving up they’re precious free time to appease a schmuck. You’re on the clock on your show, the rest of us aren’t.

Then there’s that whole “your show” thing. You can’t invite someone on your show to share opinions, then interrupt them and not allow them to finish their comments. That’s a pathetic attempt at a debate. Simply cutting someone off and saying they’re argument isn’t good doesn’t make it true. It looks like you got your debating lessons from Bill O’Rielly himself, the king of this classic sad tactic to win arguments. If you want to have a real discussion you have it in a neutral location. You aren’t allowed to have writers, and it won’t be your show. This is why Bill never leaves the comfort of his own desk except when to promote his next book. This is the other reasons we don’t want to go on your show, we aren’t interested in being bullied in by someone who has no interest in actual debate, but only aims to exploit that person to support their own opinions.

I said I might not attack your claims that the recession is over but I already don’t like you now so I’m going to. Anyone can cherry-pick 6 graphs to make their point. It wouldn’t even take in intern 3 months to design a database that tracks all economic data allowing one of your production assistants to simply query “data that supports the recession is over”. With CNBC’s budget you likely have something more advanced than this but fundamentally the same. I can make an argument for anything citing circumstantial evidence. If I could spend 40 hours a week staring at charts and data mining I could get you even better charts than the crap you got. You should fire whoever did that hack job for you. If you’re so sure this recession is over then dump your entire portfolio into a leveraged S&P 500 long ETF. Better yet, take your “evidence” to the editors of the Journal of Financial Economics and watch them laugh you out of the room. Half of the reason Weakonomics exist is because of tools like yourself.

Here’s the video which I got from Clusterstock

My favorite part is when he calls his segment the “Real Deal With Dennis Kneale, because it rhymes”. Here’s something else that rhymes:

The Real Deal With Dennis Kneale makes my gut feel like I’m going to keel over, perhaps puking my meal. Maybe if I kneel down and peel my eyelids I can watch Kneale’s Real Deal and find some appeal. No I can’t conceal that I’d like to shove my heel up this douchebag’s seal. His words are bringing up my lunch of cornmeal and oatmeal fried veal. I must stop my spiel.

You sir, are disgrace to economics, of which you have no training in but pretend to. You are disgrace to journalism, of which you’ve made a career from.

Yesterday I published a guest post on Moolanomy.com.  Moolanomy is a personal finance website and a fantastic one at that.  Its blogger, Pinyo, recently launched a new program called Moolanomy Answers, where you can ask questions about personal finance or even help answer other people’s questions.

My guest post confronts a topic I’ve wanted to talk about for a long time, beating the market return.  You’ve always heard that you simply can’t beat the market.  This is why most of us invest in index funds.  But in actuallity, you can beat the market, and some people have done it consistently for decades.  How do they do it?  Why haven’t you heard of them?  Read my post to find out.

I’ve got another post launching this afternoon here, so make sure you come back for it.  I rant on CNBC.

These days all you ever hear about is how evil credit card companies are.  They jack up fees, cut your credit limit, and change your interest rate in the blink of an eye.  Recent legislation, popularly called the Credit Cardholders’ Bill of Rights t has put measure in place to address many of those complaints.  As “evil” as credit card companies are, we find huge value in their services.  Personally, I like the convenience, expense tracking, and security that comes with it.

Let’s talk about that security.  When you sign up for a credit card you are surely pitched all their security and fraud monitoring services that come “free” with the card.  First of all, don’t think that any of this is really there to help you.  Because of ID theft laws you aren’t held responsible for fraudulent transactions, the credit card company is*.  In other words, it’s in their best interest to catch fraud quickly so they can close the card.

But how do you catch card fraud?  Your credit card can be stolen and you may go a week or so before you notice it’s gone.  The card companies use sophisticated algorithms that come from decades of data collection.  By compiling statistics from stolen card purchases, they can identify potential fraud in 2 or 3 transactions.  This is done in a number of ways.  First of all certain zip codes, neighborhoods, or even stores are known for more frequent transactions with stolen credit cards.  Say you work in the financial district of New-York City and regularly buy your day-to-day stuff, including clothes, in the area.  You’re sitting outside with your buddy and your wallet gets stolen but you don’t notice it.  3 hours later you get a text message from your card company asking if your card has been stolen.  You discover it is gone and call the card company.  You ask how they learned before you did.

The card company knows you buy most of what you need in the financial district but all of a sudden you’re making purchases in Jersey City just on the other side of the Hudson.  The fraud team knows this is odd because you’ve never purchased anything there.  Secondly, your card purchased gas in Jersey City.  Since you’ve lived in Manhattan for over 2 years they know you don’t buy gas often and when you do it’s coupled with a car rental.  Then groceries were bought at a store in a neighborhood where the crime rate is high and card theft purchases show up there 50% more frequently than the average for the area.  Finally the cardholder took out a cash advance of $500.  In 4 years with the card, you’ve never taken out a cash advance.  A text message is sent automatically to you, you call, and the card is placed on hold.

Sometimes it’s even easier than that.  Though the content of these algorithms is a closely guarded secret for good reason, I’ve heard an example or two over the years that are actual monitored patterns.  My favorite allows the card company to identify potential fraud in 3 transactions, regardless of location and prior buying habits: two tanks of gas and a pair of shoes.  Why?  Who will buy two tanks of gas on the same day in the same location at the same time?  Someone who has someone else’s card and wants to fill up their tank and a buddy’s.  The shoes make me laugh but it’s a consistent pattern apparently.

But it’s not always your card that’s stolen.  Many times it’s your card number.  Don’t worry they’ve got that covered too.  It’s very easy because much of this relies on your spending patterns.  I’ve never been to California.  If I all of sudden start “buying stuff” in California that will throw up a flag, especially if it’s things I don’t normally buy like women’s shoes, makeup, and cat food.

Of course the fraud teams at your credit card company can’t catch everything.  It’s smart to set up your own alerts.  I have two and get emails for either alarm triggered.  The first is if I spend more than a certain amount in a given transaction.  It is a low amount of which I only purchase that much in one event a few times a year.  The other is if I spend that same amount in a given day.  That way if someone goes on a shopping spree I receive an email after that amount has been triggered.  I’ve never been on a shopping spree so again I’d know if it wasn’t me immediately.  Finally I check my credit card transaction on my iPhone every two days or so.  It takes 30 seconds.  You can do the same thing online.

Credit cards are a great tool in most cases.  Some might worry about privacy concerns and prefer to carry cash.  Every choice has its disadvantages, if your cash is stolen it is gone for good.  You don’t get it back.  I’m not worried about the privacy because I know the people seeing my transactions don’t care what I’m buying.  I know this because I used to look at social security numbers and see credit reports for a living, and after 2 weeks of giggling I was numb to the whole thing.

*Merchants are also responsible for fraud and the card companies often issue “chargebacks” to the store where the transaction took place, eating into the store’s profits.  This hurts the stores and it has been suggested that there be a Merchant’s Bill of Rights as well.

Photo: andresrueda

This might be one of those posts that pisses off some people.  I’m going to attack a woman, use her as an example, and then draw a conclusion about fat people from it.

MSNBC met up Mary Uhazi, who over course of a few decades of credit based spending has run up over $60,000 in credit card debt.  No there’s no Berkley degree backing that, it’s all based on good ole fashioned American consumption.  You know, the kind that gets Keynes’s loins burning.  You can read the article to learn how she did it, but that isn’t what I’m interested in.

What I’m interested in is how pathetic and short-sighted people like Mary are.  Mary tells the reporter that she never really gave her spending much thought.  It always seemed like she could afford to make the minimum payments but one day a recession sent her on furlough

My good friend J. Money from Budgets Are Sexy linked to this story on Twitter last week.  My web browser at work blocks out most images so I had no idea what this person might look like.  After reading the article I thought to myself, I’ll be she’s fat.  Sure enough, she’s a chunker.

I emailed myself the link and used the trusty iPhone to get the pictures to come up. Why does it matter if she’s fat? Well it confirmed my new stereotype and gave me enough reassurance that economists nutritionists need to team up for a study.

My theory is that there is a measurable correlation between someone’s obesity and their credit card debt. Why? Because I think the behaviors of our nation’s biggest people are very similar to the behaviors of our nation’s biggest spenders. In fact, many of them probably run up debt buying too much food.

Both the fat and the indebted fall victim to instant gratification and a failure to consider the future consequences of their actions today. The obese gorge themselves until they die of heart disease, and the credit card crowd spends until they can no longer afford the minimum payments. It’s basically a death of its own.
This is why I want to see if there is a measurable correlation between the two people. This would be an interesting anecdote and probably give psychologists enough fodder to see if there is a psychological deficiency or if it’s genetic.

So I want to give Mary a round of applause for representing everything that is wrong with America. She’s not the only one by any stretch, but she is the archetype and dumb enough to put herself in the news. Weaky for you.

If you’re thinking I’m a jerk it’s probably appropriate. However I want you to know I am someone who has struggled with obesity and won the fight. It was sheer determination and discipline that did it for me. I’m not skinny, but I did lose 75 lbs and can run a 10k without difficulty. If you don’t know what a 10k is then you probably haven’t weighed yourself recently either. Also, I know there are skinny people with tons of debt and fat people with none, what interests me is if there is a correlation at all.

Photo: menetekel

Hey faithful readers.  I don’t do this very often mostly because I pretend not to care what you or anyone else thinks.  In all honesty, The Weakonomist doesn’t give a poop, but Philip does.  In my recent giveaway I received a number of email entries and some contained very kind words about how much they hate me like the blog, and how cute my boxer is.

Reader Feedback:
I thought this would then be a good time to ask you what you like and don’t like about Weakonomics.  I’m mostly talking about posts but remain open to criticisms about the site’s appearance as well.  Do you like the posts where I break down how something works (like Twitter, the Fed printing money, and insurance companies)?  Do you like the College of Weakonomics series?  Want more personal finance stories?  Too much coverage of economics?  Is my dog actually ugly?

Anything goes here.  Just let me know your thoughts.  You can leave a comment, or if you wish to remain anonymous you can send me an email.  My address is philip [at] weakonomics [dot] com.  The funny formatting keeps internet bots from picking up on the email address and sending spam.

Advertisements:
Not everyone notices ads, I usually don’t.  However enough of you do so that it makes sense for me to place ads on the site.  They come in a few different forms.  There are four boxes in the sidebar that contain advertisements.  I make money if and only if you click on the ad and then sign up for the promoted service.  Sometimes they are free (like ING and UpDown) and other times they cost money, like Allstate Insurance.  I want you to know that I am highly selective of the products promoted on this site.  I will not serve an ad for a product I don’t directly use myself or would use if my situation warranted it.  For example, I used to have an ad for internet security software for parents protecting their children.  If I had kids this is something I would do.  I rarely talk about the products, instead letting the ads speak for themselves.  From time to time I will write a post about a product or service, however I will make it clear that it is something I’m compensated for if you sign up.

The other kind of ad I use regularly is Google Adsense.  The way this works is Google scans the content of my site and sends in relevant links in either a banner format of as actual links.  These are not links in the posts, but instead links in the bottom of the sidebar or my posts.  They will look different from typical links and will take you to sites that are not Weakonomics.  I am paid a few pennies for each click.  Please only click on the link if you are interested in it.

I also want to note that sometimes I might review or promote something because I received an incentive to do so.  Rest assured, this will only be done with products I already like or am interested in using.  I will explicitly outline in a post what incentive I’m receiving.  So far you have witnessed this twice.  To review 10,000 ways and buck book I received free copies of these books.  Some think that this action may sway my opinion of the product.  I’ll let the current respect I’ve earned speak for me here.  If you have a concern about this please contact me when a post goes up and I’ll add more details to a post as appropriate

The reason I’m talking about this is because the FTC is currently thinking of additional regulation requiring greater transparency with bloggers and how they are paid.  What I’ve just talked about goes way above and beyond the proposed rules.  I just want you to be aware of the way I’m making money.  Rest assured I’ll make less in a year than you will make this week, so it’s not a lot.

Donations:
Over the last 18 months I’ve received a total of 4 (count em 1-2-3-4) requests from people interested in how they might be able to support the site financially.  You aren’t charged to read this blog, nor will you ever be charged to read it.  Some people like free content so much they are willing to donate to help cover the costs to keep the site running.  I’m not one of them, but bless you few who are.  You’re amazing.

I’ve posted about this once before but want to point out the button in the sidebar that allows you to donate to Weakonomics.  As an incentive, half of your donation to Weakonomics goes to the Jump$tart Coalition for Personal Financial Literacy.  Additionally, donations of various denominations include additional incentives.  Please see this page for more details about the donation process, or just click the donate button in the sidebar, if you’re interested.

Thank You To The Readers:
When I started Weakonomics in the early months of 2008 it was truly all about me.  I’ve come to know some of the readers better through comments and emails and this site has really turned into something else.  I don’t know what comes next or where Weakonomics is headed, but I’m thankful to have you along for the journey.  From my family to yours, bless you and thank you for reading.

Sincerely,

The Weakonomist
The Sheconomist
The Boxer

Photo: karlhorton

I’ve written before why I don’t like the Dow Jones Industrial Average. Manshu from OneMint.com gets a little more scientific in the breakdown of the rumored flaws in the Dow. In separate instances I was surprised, expectant, and educated. This was a great read in which Manshu breaks down some of the myths of the Dow and whether or not they’re true. In my opinion, this is the can’t miss read of the month. I loved it.

Read: Dow Jones Industrial Averages Mythbusters Edition

This is the rest of the good stuff I read this week:

Get Rich Slowly recently went on an adventure to clean out his workshop.  There JD discovered remnants of hobbies that never got off the ground, nostalgic items never used bought and never used, and piles of junk.  When I moved out of my apartment after college I left a lot behind in the dumpster.  I wanted to get rid of my junk.  As I get married this year I’m again dumping a lot of crap.  Last weekend we registered for gifts for the wedding.  We were told to register for xxx number of items and could only register for 1/3 of it.  The thought of serving trays, useless kitchen tools, and expensive china makes me sick.  Not only will we not have a lot of space, but I don’t want all that crap taking up my space.  One of my fears is to someday be able to afford a large home and I’ll just fill it with a bunch of junk and have nothing to show for it.  I’m glad JD shared his experience with junk, because it inspires me to avoid junk at all costs.

Tough Money Love quickly touches on the topic of diesel engines in passenger cars.  Americans have often shied away from them, only because of the stigma of diesels of yore.  Today, diesels get fantastic gas mileage, the kind of mileage that rivals hybrids for the same or better price.  What I would really like to have is a BMW 320d from the UK, which based on my estimates, would be sold for about $38,000 nicely equipped and get 42.6 mpg.  Base price of $35,000 puts it right with the new Lexus HS 250h but with better gas mileage (the Lexus expected to get 35/34 mpg) and a hell of a lot more fun to drive.  It won’t happen though, so you Ukes enjoy your bimmer.  I’m not hating on hybrids, they are part of the future, they just aren’t fun and not as efficient as they should be.

Saving For Serenity is, like me, planning a wedding. His budget is tighter than mine with The Sheconomist, but we do have the benefit of her parents’ financial support which I acknowledge is a luxury.  What I like about this post is that he is being completely open-minded about wedding expenses.  If you had a budget of $10,000 you might simply look at a $2,500 wedding planner as a waste of money, for ANY wedding.  But he acknowledges that given the budget they make perfect sense.  There are so many friggin details in wedding planning it’s maddening.  We have a planner, but are saving quite a bit by only using them for the details of the wedding day instead of having them as the go-to point of contact for everything during the entire planning process.  We are paying a fraction of $2,500, but we’re still paying for a planner.  Good on this man for his honesty, we should all be so open-minded about everything from personal finance to politics.

Thicken My Wallet writes about the hail mary school of investing.  This is in reference to buying stocks that have been hammered because of bad times.  The two best examples today are Citigroup and GM.  Both have seen their stock prices tank to next-to-nothing.  Many people think they can make a quick buck.  It’s possible, using UpDown I’ve ridden the Citi ride between $2-$4 quite successfully.  Ultimately it’s foolish to invest in these companies thinking you will make a quick buck.  You hear stories like mine above, but what you don’t hear about is I also took a 30% loss on GM stock while making (fake) money on Citi.  If you believe a company has turned a corner and new management shows promise, you have a point.  But 100 years of brand equity isn’t enough to warrant an investment.

Don’t forget about the Carnival of Personal Finance this week over at my good buddy’s blog, Suburban Dollar.