Business postsSaturday August 29, 2015
Letters from Corporations I
I have three letters from corporations sitting on my desk that I need to deal with in some fashion. They are from:
- Bank of America, informing me that my late payment fee is going up to $38 (from $35, but they don't say that), effective Nov. 14, 2015. “Thank you for your business.”
- CVS/Caremark, informing me that if I insist on getting a particular drug from the pharmacy I will have to pay full price. I can avoid this with a 90-day supply, rather than a 30-day supply, but I can only get the 90-day supply through CVS/Caremark. “Sincerely...”
- Anthem, informing me that “cyber attackers executed a sophisticated attack to gain unauthorized access to Anthem's IT system,” and that “You are receiving this letter now because Anthem made additional efforts to obtain a current mailing address for potentially impacted indviduals...” Anthem has also hired a company to protect my identity for two years at no cost to me. Additional tips are given.
McAdvice to McWorkers Making McPay
Maybe old news but worth repeating. Its from William Finnegan's New Yorker piece on the unionization of fast-food workers and the struggle for $15 an hour (or at least more than $7 and change):
McDonald’s has tried to acknowledge the real lives of its workforce by providing counselling through a Web site (since taken down) and a help line called McResource. A sample personal budget was offered online last year. The budget was full of odd assumptions: that employees worked two full-time jobs, for instance, and that health insurance could be bought for twenty dollars a month. The gesture made the corporation look painfully out of touch. The same thing happened with a health-advice page. Workers were advised to break food into pieces to make it go farther, sing to relieve stress, and take at least two vacations a year, since vacations are known to “cut heart attack risk by 50%.” Swimming, one learned, is great exercise. Fresh fruit and vegetables are good for you, McDonald’s declared. A mother of two in Chicago, who had worked at McDonald’s for ten years, called the help line and found herself counselled to apply for food stamps and Medicaid. This was, at least, realistic.
Read the whole thing.
Too Big to Care How It Looks
So I got a notice the other day from Chase. You know: Chase. I was supposed to read the notice carefully and retain it with my other important documents. It concerned by privacy. Or lack thereof. It began with this thought:
WHAT DOES CHASE DO WITH YOUR PERSONAL INFORMATION?
For some reason, this was in a chart labeled “FACTS,” when, you know, it's more of a question. But onward.
I assumed Chase was going to allay my fears about what it did with my personal information. Instead I got another chart:
|Reasons we can share your personal information||Does Chase Share?||Can you limit this sharing?|
|For our everyday business purposes —such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus||Yes||No|
|For our marketing purposes — to offer our products and services to you||Yes||No|
|For joint marketing with other financial companies||Yes||No|
|For our affilates' everyday business purposes — information about your transactions and experiences||Yes||No|
Those aren't really reasons, are they? Just like the other wasn't really facts. But onward.
They mention three other areas where they share my info—including “For non affiliates to market to you”—but apparently I can limit those. If I call. When I call. So we're not completely powerless. Just for all the above: everyday business purposes and marketing and joint marketing. But that's it. For now.
Anyway, nice notice. So nice to come home to.
Shorter Sorkin: Michael Lewis Focuses on Problem I Never Bothered to Write About
Last month I read Michael Lewis' “Flash Boys: a Wall Street Revolt,” in which the author of “Liar's Poker,” “Moneyball” and “The Blind Side” argues that high-frequency trading has created a rigged game on Wall Street, in which high-frequency traders can utilize faster speeds to figure out what we're doing before we do it, then act as middlemen in the transaction: buying what we were about to buy and selling it back to us at a higher price. Basically they're front-running trades. Legally.
But there's been pushback against the book by, among others, Andrew Ross Sorkin of The New York Times. I meant to check out his critique after reading the book. I finally did this week.
Sorkin basically agrees with Lewis that there is a problem and the game is rigged, or “rigged”: “(There remain a host of other problems that still make it 'rigged'),” he writes. He just feels Lewis is blaming the wrong people:
He points mostly to the hedge funds and investment banks engaged in high-frequency trading. But Mr. Lewis seemingly glosses over the real black hats: the big stock exchanges, which are enabling — and profiting handsomely — from the extra-fast access they are providing to certain investors.
Of course Lewis does write about the exchanges, particularly Bats. In fact, the whole narrative of the book is built around the creation of a new exchange, IEX, one designed to be more fair—to offer, in a sense, exchange neutrality.
Even so, it's interesting that Sorkin agreed there was a problem. So I assumed he'd written about high-frequency trading before.
He has. A search on the Times website (for “high frequency trading” and “By Andrew Ross Sorkin”) yielded, when you parsed out the Dealbook/Times duplicates, three results.
The first, “A Lack of Transparency In S.E.C. Disclosure Rule” from November 2010, is about the troubling way the SEC allows corporations to release their earnings reports: on their website rather than as a press release issued simultaenously to hundreds of news services. The HFT reference? About halfway through:
In an age of high-frequency trading when every millisecond counts — even in after-hours trading — the move toward companies’ distributing earnings and other market-moving information via their Web sites rather than through wider distribution channels raises some serious questions about transparency.
It's the super-fast age we live in. But there's no critique of it.
The second column, “Volatility, Thy Name is E.T.F.” from October 2011, deals with the new volatility of the stock market, including the flash crash of May 2010. The HFT reference? That it wasn't the problem.
The third column is his critique of Lewis and “Flash Boys.” He calls the book important. He writes this:
Mr. Lewis’s well-crafted narrative highlights a perverse system on Wall Street that has allowed certain professional investors to pay hundreds of millions of dollars a year to locate their computer servers close to stock exchanges so they can make trades milliseconds ahead of everyone else.
In some cases, the superfast investors are able to glean crucial information from the stream of trading data flowing into their systems that allows them to see what stocks other investors are about to buy before they are able to complete their orders.
Then we get the line about the wrong villains: the exchanges, not the bankers.
Sorkin, in other words, isn't saying there isn't a problem. He just implies that Lewis is clever, hyperbolic, and demonizing the wrong group of people about this problem ... which he, Sorkin, has never bothered to write about.
Sign of the times.
Why the Want Ads Suck
“The reason [the minimum wage] has become a big political issue is not that the jobs have changed; it’s that the people doing the jobs have. Historically, low-wage work tended to be done either by the young or by women looking for part-time jobs to supplement family income. ... Now, though, plenty of family breadwinners are stuck in these jobs. That’s because, over the past three decades, the U.S. economy has done a poor job of creating good middle-class jobs; five of the six fastest-growing job categories today pay less than the median wage. ...
”The situation is the result of a tectonic shift in the American economy. In 1960, the country’s biggest employer, General Motors, was also its most profitable company and one of its best-paying. It had high profit margins and real pricing power, even as it was paying its workers union wages. And it was not alone: firms like Ford, Standard Oil, and Bethlehem Steel employed huge numbers of well-paid workers while earning big profits. Today, the country’s biggest employers are retailers and fast-food chains, almost all of which have built their businesses on low pay—they’ve striven to keep wages down and unions out—and low prices.
“This complicates things, in part because of the nature of these businesses. They make plenty of money, but most have slim profit margins ... The combined profits of all the major retailers, restaurant chains, and supermarkets in the Fortune 500 are smaller than the profits of Apple alone. Yet Apple employs just seventy-six thousand people, while the retailers, supermarkets, and restaurant chains employ 5.6 million.”
-- James Surowiecki, “The Financial Page: The Pay is Too Damn Low,” on the New Yorker site. Read the whole thing.