The dangers of free stock trading

I noted recently the crazy things being done to inflate the stock market. It’s good in a way that the Fed and Congress are trying to keep Americans from feeling the oppressive weight of our economic collapse. We may have gotten a $1200 one-time payment and perhaps some extra unemployment compensation. But the biggest beneficiaries of government largess are clearly businesses, generally the large types.

But it’s not just any businesses. Small businesses may have gotten some short-term loans, but those that are publicly traded are getting huge shots of adrenaline thanks to government. The government has decided that markets are apparently too big to fail, so it’s going to insulate investors from its risks.

When markets begin to notice the actual underlying economy, the Fed usually comes to the rescue and creates a whole lot of money used to buy assets. This happened again just yesterday when the markets started to slip. With the supply of these stocks reduced, the price will artificially go up. This mostly explains why the stock market has nearly fully recovered from February and March’s downturns.

Along the way a lot of rich people got a whole lot richer. America’s billionaires added an estimated $434 billion to their fortunes during the pandemic. A lot of rich people were like me and saw the crisis coming when the first COVID-19 case was diagnosed. So they sold high and bought when prices were deeply discounted in March. The Fed was so alarmed by falling stock prices they righted the situation for them by buying stocks at inflated prices.

Most of us don’t directly own stocks. If we do, they are in retirement accounts and not easy to manipulate. I don’t own any stocks directly. They are all mutual funds and EFTs. Why? It’s because I seek safety in market trends. Buying in a pool limits risks, even if it may flatten rewards. Part of this strategy also includes not getting too overleveraged in any type of asset. Previously I was 50-50 on bonds and stocks. Now I am 60-40 bonds and stocks. So I made some profit from all of this, but it was a modest one.

Not so for our more moneyed class. Confident that the Fed will come to their rescue if things turn south, they are willing to buy and sell stocks directly. They look for drops like last week’s five percent plunge as a buying opportunity. They know the Fed will respond.

But there is arguably a new factor at work: millions of new day traders most of who arguably don’t know what the hell they are doing. Brokerages have generally stopped charging a commission to sell stocks. So anyone can now buy and sell stocks at no charge from their local smartphone. You don’t even have to buy full shares anymore. These companies will also allow you to buy fractional shares. So if you want to own just $5 in Amazon stock, you can do that. Since it’s currently trading around $2600 a share, fractional shares allow anyone to buy in.

These stock brokerages still make money. They make it from the cash balances in your accounts. This money gets loaned out, and I doubt it is FDIC insured. Some pay a tiny interest rate on these balances, like .01% APR. You could do a lot better keeping this cash in FDIC-insured banks instead, and there are some like Ally Bank (that I use) that pay a respectable interest rate.

Some Americans, particularly those doing reasonably well, saw their $1200 stimulus check as a reason to dabble in day trading. This “play money” has become investment money and may also be contributing to the high valuation of stocks at the moment. It’s arguably led to some crazy things. Lots of people are investing in bankrupt companies like JC Penney and Hertz, pushing up these stock prices when they may be dissolved and the stock could become worthless. “Sexy” stock tracking symbols also seem to be disproportionately overvalued. Some investors see a sexy stock symbol and with no other analysis figure they should own some of it.

So I’m not too surprised given that the Fed won’t let markets collapse and that people can now easily buy and sell stocks with no fees that markets are doing so well. At some point though you have to wonder if this house of cards will collapse.

Last week’s drop shows that investors occasionally wake up and realize, “Gosh, these stocks I own are risky and way overvalued! COVID-19 is not going away and we are in a deep recession that seems to be here for the long term. I should sell!” And they do until the Fed comes to the rescue again.

But at their core many of these assets are minimally wildly overpriced and are arguably junk. I sure wouldn’t be buying in financially stressed companies like Carnival, Delta Airlines or Hertz right now. Maybe I would buy some Delta stock if I were looking twenty years down the road. It is the world’s largest airline carrier so if any airline is likely to survive the crisis, it will. Some are betting the same with Hertz: it’s one of the original car rental brands, and it’s everywhere so even though it’s in bankruptcy court, it has to survive somehow and eventually be profitable, right? The government won’t let it fail, right? Well, maybe. But it remains a risky investment because demand has collapsed and the company is wildly overleveraged.

Or it could be that our economy is being wholly upended and that includes our markets too. It makes sense that some companies, like Amazon and Walmart, are doing so well. They are relatively well positioned to prosper in a new economy where delivery to the home can be done profitably. Investing in companies should be based in part on their agility, as well as a healthy cash balance sheet.

Yet so many companies are overleveraged with debt and offer a business model equivalent to the milkman of a hundred years ago. Investing in these companies is risky. I wouldn’t do it, but our smartphones let us make micro mistakes like this every day, at no obvious short-term cost.

Abolish the police?

It’s too early to say, but the death of George Floyd may actually lead to real policing reform in this country. The outcry has been enormous on all levels with protests in all U.S. states plus many foreign countries. It’s not one time protests either. This thing’s got legs. It’s causing brouhaha even here in Northampton, Massachusetts, about 85% white. Thousands have come out to demonstrate and our virtual city council meeting turned into a seven hour meeting as speaker after speaker called for defunding our police department, or at least redirecting some funds where it might do some good.

Defunding the police though sounds like abolishing the police. It definitely gets your attention, but for the most part those advocating for defunding really mean taking much of the police department’s budget and using it to address social issues instead. The basic issue is that police are first responders, and they are generally poor first responders on lots of the issues they encounter. They can’t do much to solve homelessness, but they can force homeless people to stop sleeping on park benches. Police operate on the assumption that using a hammer solves all problems, because that’s pretty much the only tool they have. The problem is made much worse because people who become cops are generally law-and-order types, who view life through an authoritarian prism. They are also disproportionately white.

So some remarketing is needed because defund the police in the end is likely only to play into the hands of Republicans, whose mantra is always rule of law, except, of course, for people like them. I’m not surprised that so many white people like me are having a hard time getting their minds around the scope of police violence. I can count on one hand the number of times I have been pulled over by a cop, and I’m 63 years old. For a lot of black people, it’s routine. Since my experiences with the police have always been good, it’s hard for me to believe that many of these many officers will behave so differently with people of a different skin tone.

The George Floyd murder though proves beyond a shadow of a doubt that police do murder people of color. It’s unclear why this particular murder may actually change things this time. But you know you are in trouble when, for the first time, two out of three white Americans agree that police use excessive force against people of color.

Clearly, your local police department will never go away. It’s not going to work if I am burgled if I am sent a social worker instead of a police officer trained to protect lives and property. Most policing though does not require a cop with a gun. The most effective policing likely requires police to be perceived as non-threatening and part of the community. That’s why true community policing tends to work well. Probably eighty percent of policing should be proactive rather than reactive. Generally, police with guns should only be called after police with nothing more dangerous on them than a billy club first assess the situation. We need a lot more Sheriff Andy Taylors on the street.

Those calling for police reform are for the most part right. Policing needs to change fundamentally, and many of those who do our policing need to find different professions. Laws that insulate cops from violent behavior need to be removed. Citizen tasks board need to look into police violence and have the power to remove officers. Clearly in many cases, police act as agents of oppression, forcing many mostly people of color to endure lives that are unendurable.

If police routinely treated white people like people of color, there is no question that we would get the kind of policing we need. We would not tolerate being pulled over disproportionately, roughed up or beaten by police. If we had incomes like most people of color, we would not tolerate substandard housing, lack of decent medical care and wages that rarely rise. We don’t see the bubble of privileges we’ve lived our lives in because it sounds like too wacky a conspiracy theory to believe is true. But it clearly exists, and for whatever reason, George Floyd’s death seems to have finally revealed a truth most of us whites have chosen not to see.

But we can’t wholly abolish the police. We need to remake the police and much of our society that is not serving the needs of the people. I strongly suspect that when the backlash to this is borne out in November, it will be clear to even Republicans that the status quo is no longer acceptable.

A time for courage and for antacids

Five months from today we are likely to wake up and find that Joe Biden is our president elect. Donald Trump’s reelection seems increasingly unlikely, given that many polls now show Biden has a ten-point lead over Trump. Or maybe we won’t know. One factor in this election is that there may be a crush of absentee ballots that will take days to tabulate. But hopefully we are less than five months away before we can begin to return to some semblance of normalcy.

But can anything go back to normal after such a disruptive president as Donald Trump? Trump has been our gorilla in the china shop president, gleeful in breaking norms and rules. Given his advanced case of narcissism, as I speculated in an earlier post, he is unlikely to go quietly. In fact, he will go kicking and screaming, and will do his best to initiate a fascist state before then.

This week’s events alarmed most of us, which were preceded by last week’s alarming events with the death of George Floyd, unquestionably murdered by three officers of the Minneapolis police. You can watch all 8:46 seconds of it online, if you have the stomach for it. The murder caused predictable demonstrations followed by some looting and violence. Never one to miss an opportunity, Trump used the event to move us more dangerously close to fascism. He threatened to deploy active duty troops wherever needed, supposedly to restore order. There is a law called Posse Comitatus that prohibits just this, but of course Trump never seems to be concerned about his law breaking. He may use the Insurrection Act instead which other presidents have used, for example, to force integration in Alabama public schools but which most scholars agree is out of line for these events.

Chances are if it is even a fig leaf excuse, he will use it, which suggests dark days ahead. It was brought out on Monday when he ordered the Secret Service and Park Police to clear Lafayette Square of protestors who were peacefully demonstrating, all in order to stage a photo op in front of nearby St. John’s Church holding a Bible held upside down. To show what a man he was, the forces used tear gas, rubber bullets and a dangerously low helicopter hovering over protestors.

Clearly Trump hasn’t read the Bible, but even if he were a Christian he wouldn’t be the first Christian to ignore Jesus’s advice to turn the other cheek. In pursuit of the Christian evangelical voters, his forces also pushed out a pastor of the church. All this was made much worse because the order apparently given by our Attorney General supplicant Bill Barr and endorsed by our Secretary of Defense Mark Esper. Esper later seemed to walk remarks that active duty troops should be used to quell unrest.

The next day Trump engaged in another obscenity by staging himself next to a statue of Pope John Paul II, who must be turning in his grave in the Vatican. Meanwhile, protests continue. Even our little city of Northampton, Massachusetts had more than a thousand people protested in front of the police department. Our chief of police took a knee with protestors. A huge dance is underway nationally and there’s really no way to know how this will all turn out. For most of us with a lick of common sense, we know it’s likely to get much worse, not better.

Trump is feeling the heat, of course, but all he knows how to do is double down. None of this actually helps him get reelected, so it’s counterproductive. He and the Republican Party are hoping with enough voter suppression they will eke out a win somehow. Trump didn’t win in 2016 with his base; he just managed to convince enough other voters in a few swing states (just 80,000) to pull off his unlikely victory. To win he will have to persuade more than his base, but it’s clear he won’t bother. From the day of his election he’s believed that he can win reelection with just his base, which is slowly diminishing.

All this plus a COVID-19 pandemic. It has officially caused more than 100,000 deaths in the United States. Just his handling (or rather lack of handling) of that is enough to doom his reelection, but it only gets worse from here on. A country that has five percent of the population and 30% of its deaths is obviously doing things catastrophically wrong. A twenty percent unemployment rate won’t help either. As the deaths mount up, it will just shrink his base, which are disproportionately old and white. Many seniors seem to have woken up and Biden now leads among them, perhaps because the sense Trump would go after Social Security and Medicare if reelected.

But of course the election won’t matter if you can neatly create a dictatorship before then. Trump realizes he can’t stop the election and he is likely to lose it, but that doesn’t mean he can’t claim it was rigged and see if he can use the armed forces to ensure that he retains power. He seems to be doing all the things that wannabee dictators are doing, just ineptly. It remains to be seen whether the military would be true to the people or Trump. It sure looks like these demonstrations are being used by Trump to see what he can get away with.

In any event, if you’re not having trouble sleeping and you aren’t reaching for the antacids, you should be. There are some signs of hope, but it’s hard to know how much to read into them. George W. Bush, for example, spoke up for protestors without actually criticizing Donald Trump. Any Republicans left who are looking for cover for mildly rebuking Trump can site Bush. Barack Obama doesn’t seem to be staying on the sidelines either. We haven’t heard from our only other living ex-president, Bill Clinton, but hopefully he will pile on the criticism too.

None of this is likely to matter to Trump, but it is likely that whatever he attempts he may find himself hastily walking back. It may be that his ever-expanding line of privilege will finally make too many key Republicans turn against him. A bully’s power is actually very fragile. Republicans may be already sensing the electoral disaster likely to take many of them out now less than five months away. Some may be more scared of being voted out of office than hanging with a losing Trump.

As screwy as today’s events are, I know in my gut that the time between Trump’s defeat and the inauguration of his likely successor will be the most dangerous time for our country since the Civil War, or perhaps in our country’s entire history. It’s time to stock up on the antacids. It’s also time for many of us to show the backbone we haven’t, particularly many people of privilege, i.e. white and moneyed guys like me. This likely won’t be solved at the ballot box, or by liking someone’s tweets, but by uncomfortably personal, face-to-face, civic engagement likely happening tonight in a city near you.

Cash back cards are no longer offering spare change

The number one rule of credit card management is to always pay your balance in full when you get your statement. When I had to watch our cash flow more closely, every time I made a purchase with a credit card I wrote it into the checkbook. That way I didn’t worry if I had enough money to pay the bill in full when it arrived, plus it gave me a high level snapshot of whether we were spending beyond our means.

Thankfully, the latter is no longer an issue, but what has changed is we don’t work for a living, at least not much. I still earn some income from consulting, but it’s gravy. So any extra, unearned income you can bring in is good. We’re retired so the pension plus 401K withdrawals more than amply pay our bills.

Still, the habit that served me well years ago still works fine, and I still subtract credit card debits on our checking account. But now, with cash back credit cards, I’ve discovered that not only do I not have to pay usury interest for charging stuff, but I can make the credit card an income stream as well.

There are lots of cash back credit cards out there, but finding the right one for me had to meet a number of conditions. First, I don’t believe in paying for anything when I don’t have to. So many cards come with nice perks but at the cost of $100 or more a year for the privilege. So a no annual fee cash back credit card was what I wanted. Second, I wanted it to be generous. A lot generous. Fortunately, I found just the card I wanted where I have been banking for more than thirty years. Okay, it’s not a bank. It’s a credit union. Pentagon Federal Credit Union, for short. We get two percent back on every purchase we charge.

At one time you had to work in the Pentagon or be a member of the armed forces to bank at PenFed. I worked there from 1988 to 1998. That’s not true anymore. Pretty much anyone can join. It was easy to bank there because there was an office in the promenade. We’ve had checking, savings and credit cards from PenFed for years and still do. But in truth, most of our savings are now stored at Ally Bank, which offers much more generous interest rates than PenFed.

So as a place to get a good interest rate on your money, PenFed’s not great but better than most banks. But with their Power Cash Rewards card, we get that sweet two percent back for everything we charge. And since we charge at least $2000 a month, and that means we get a rebate of at least $40 a month.

Obviously this won’t be the solution to your financial crisis and you can’t pay the rent on this money, but it does add up. To make it work though, in addition to not carrying a balance every month, you should only charge stuff you were going to buy anyhow. It makes no sense to buy a new sofa to get two percent back if you don’t need one.

To get the two percent though I had to create a redundant checking account, an Access America checking account and put $500 in it. The interest rate on this account is currently .2% per year, which is actually somewhat decent these days. You also have to not let it drop below $500, or you get 1.5 percent cash back rate instead. Since I already have a different checking account there, it was no problem.

Since I applied for the card last October, it has earned us $402.81, or about $57 per month. The amount has varied from $44.64 for the latest month (it’s hard to spend too much money stuck at home during a pandemic) to $89.33 in January (when we paid the balance due for a cruise we took in March). At this rate we should earn close to $700 per year. Even better: this income is tax-free. Generally, the IRS considers it a discount, not real income although that could change.

We also got a $100 sign up bonus after the first month. This income might be taxable but if it is, it obviously won’t amount to a lot of money.

$700 a year tax-free income is not bad for buying stuff I would have bought anyhow. I think this is the best deal out there for most ordinary folks. If so, you might want to join Pentagon Federal Credit Union just to get the card.

The Fed is doing some very alarming stuff

Should you care about the Federal Reserve? Sometimes called the Federal Reserve Bank (it’s not a real bank), but generally just “The Fed”, the Fed basically controls our money supply. It does this with virtually no oversight by those who ultimately hold the bag when it makes mistakes: us taxpayers.

I am most alarmed by what the Federal Reserve has been up to lately. It looks both completely sane and completely crazy. To start, the Fed cut interest rates banks can charge to borrow from each other, or the Fed itself, to zero. This happened in 2008 too and it’s their way of stimulating the economy. I noted in an earlier post that this seemed to be the last trick in their toolbox. Since both consumers and companies were already in hoc to the maximum, this wasn’t a viable way to stimulate growth anymore. But it was what they knew how to do, so they did it.

But the Fed has invented some new tricks they haven’t done before. The Fed has basically decided to bail out any business, at least those that are publicly traded. In the last recession, a lot of large businesses were too big to fail. Now it looks like most businesses in the United States that are publicly traded are too big to fail, in the eyes of the Fed.

Most of these businesses got in trouble because of the cheap money the Fed has promulgated since the previous recession. With no rules, businesses borrowed instead of investing and saving. Mostly they used borrowed money to buy back their own stock. When the stock price invariably went up due to supply and demand, its executives (whose pay is largely based on stock prices, which they get at a discount) sell them and profit. In short, the Fed’s policies of making money so cheap in many ways made this new depression so much worse.

During the Great Recession the Fed also bought a lot of corporate stock too, to show faith in the market. It helped stabilize things and turned the market around, although it took a very long time. Now the Fed is buying corporate debt in unlimited quantities. Basically a business tells the Fed gets to say how much their debt is worth as a share of their company, and the Fed will buy it, no questions asked. Essentially the Fed is paying inflated prices for very shaky corporate debt that no one else wants to buy.

In exchange, companies get some ready cash to help them tie things over. Maybe the Fed will recoup its investment and eventually even make a profit for us taxpayers. But this money was created and doled out with essentially no oversight. The Fed is not accountable to anyone. While there are certain things the Fed cannot do, anything not specifically prohibited is in theory legal.

If I were to load up my family’s portfolio with junk bonds, my spouse would likely divorce me. But when the Fed does the same, there’s no spouse to object, and no oversight to worry. You have to hope the Fed knows what it’s doing, and Donald Trump appointed many of them. God help us.

I don’t have much trust in the Fed. These tactics strike me as desperate. Moreover, they are letting the rich reap a huge windfall. Many of them were like me: smart enough to sell at peak market when we knew it wouldn’t last due to COVID-19. They bought more stock at low market, toward the middle of March. And now with the stock market reaching their pre-crash highs again — due to the Fed buying so much stock that supply and demand is inflating their prices artificially again, despite the ruined economy — they are cashing in again. It appears that the Fed is exacerbating income inequality in the name of keeping the economy from collapsing even more. The Fed is becoming a wealth distribution mechanism that seems to favor the rich.

A rational government should not tolerate this. The Fed is basically trying to keep American capitalism, as we have known it, going. It’s just that it looks like American capitalism is in its death throes. A model of capitalism that is inured from the consequences its actions like the environment costs it inflicts on the rest of us deserves to die. If it is to be replaced at all, it should be with a version of capitalism that works in the interests of the people, not against it.

In short, the Fed’s actions strike me overall as desperate and very chancy. It needs oversight and reigning in. Consumer advocates, and not Wall Street insiders should oversee it. It needs to be accountable.

Donald Trump and the Republican Party are trying to kill you

No, really. Donald Trump may not actually want you specifically dead (at least, if he hasn’t Tweeted your name), but that seems to be the effect of his words and actions.

Strangely, those he wants to kill the most seem to be his most loyal supporters. Maybe he doesn’t actually want a second term? If so, I suspect his psychoses won’t let him admit it to himself, so maybe he’s acting on a subconscious level.

But he must understand at some level that he’s unlikely to win reelection, even when he and his Republican cronies pull out all the voter disenfranchisement stops. It’s too big for anyone to rig because our voting system is too decentralized. Oh, I’m sure some will try. The Russians are probably targeting the election systems of swing states. Such attempts are likely to be uncovered, as most states routinely audit paper ballots against electronic records. With the likely unemployment rate come election likely in the teens, or higher, both he and his party are likely to lose massively.

Hitler chose suicide for he and Eva. Trump may be choosing it for his most loyal supporters. For example, Trump wants you to know he’s taking hydroxychloriquine, although it sounds like he plans to stop taking it soon. Trump is such a massive liar that if he’s getting it at all, most likely the pills are going down the toilet. Following Trump’s advice doesn’t sound good if you value your life because today’s Washington Post reports its linked to increased risk of death for those with COVID-19.

Sudden cardiac death though is not a bad way to go, if you have to go, and for Trump the death of his supporters may be preferable to the shame of defeat. And if it’s likely to fell anyone, it’s likely to fell Donald Trump. He has most of the risk factors: advanced age and other underlying medical conditions including his obesity. In addition to killing him and many of his supporters, also disproportionately older and obese, it might kill some of those who actually depend on the drug to control lupus but can’t get it, due to Trump’s promotion of it. One possible reason he’s hyping it: he may have a financial interest in its supplier. Or it could be he just wants you dead. We know of at least one documented case where it did.

Or maybe you should consider other treatments the president recommends or is wondering about. So far I haven’t heard of anyone trying to ingest Clorox or figuring out a way to get a suntan from the inside, as Trump mused about at one of his task force meetings. It wouldn’t take much Clorox to kill you, and even less to severely injure you. It’s also a pretty fast way to go, but doesn’t sound too pleasant. People prefer to commit suicide by gunshot wound or jumping off of building; dying by drinking Clorox sounds particularly unpleasant. I don’t think it’s possible to give you ultraviolet radiation inside your skin, not without peeling a whole lot of it back with a scalpel, which might kill you by itself from the massive bleeding or resulting infections.

I have to wonder what someone ten years ago reading this would say to themselves: WTF? No one ten years ago would believe we would elect as president anyone stupid enough to advocate any of this stuff. Ten years, even Republicans would be first to say any such “president” should be removed, or at least 25th amendment-ed. But if Trump’s base is around forty percent of us, I have to assume that many of us figure it’s okay, but perhaps only if Trump says it’s okay. Hopefully most of them won’t actually try it, but I’m guessing some of these same Trump supporters thinking COVID-19 is all fake news and are busy rubbing shoulders with strangers on beaches would probably drink some of this latest Jim Jones version of KoolAid.

But it’s not just Trump that wants to kill you. It’s the whole Republican Party. Republicans in general though are less explicit about it, just not as much as you might think. Texas’s lieutenant governor Dan Patrick was one of the first ones to say, heck, I’d be first to get in line to die if it meant that my grandchildren could keep living the American Dream. Strangely though no one has seen Dan Patrick volunteer to up his odds. I have to think he’s hoping that you will die for the Republican Party instead. Why? Because they are the Party of Life, I guess.

But there are plenty of other more subtle ways to kill you. For example, by loosening the air quality standards. This has the advantage of not just killing Republicans, but disproportionately more of the people they really hate, which is broadly anyone who is poor and not white, or either. Asthma seems to disproportionately hit African Americans, but really anyone whose idea of affordable housing requires living near petrochemical plants or in dense, urban neighborhoods is a good candidate for death via asthma.

So whether overtly, covertly or unintentionally, it all amounts to the same thing. Donald Trump and Republicans in general want you dead. And if not dead, then at least have the courtesy not to vote. They’ll do their best to keep you from doing it.

Praise Jesus!

The joys and hassles of self publishing

So I published a book! It’s self-published and no, I won’t link to it here. This blog is, or attempts to be, anonymous, although someone with enough time could probably figure out who I am. Also, the book is technical. It’s not like I am writing the great American novel.

I’ve always wanted to write the great American novel, but even in retirement I can’t seem to find the patience to write it. First of all, publishing a novel through legitimate (not self-published) channels is probably too high a bar for me. My wife has been trying for decades to get something published. She’s published a lot of fan fiction. She’s a very good writer, probably better than me, so if she can’t do it, I figure I probably can’t either. Second, I probably don’t have the patience for it, although being retired I really can’t claim that I don’t have the time anymore. Self-publishing this technical book though was doable. It remains to be seen if it will also be profitable.

But I analyzed the market and there’s really nothing like it in the field, and it’s about the work I do for side income anyhow. Lots of people are happy to pay me for my knowledge and abilities. I’ve had over four hundred clients since I started the business in 2006. Also, I have enough writing skills to at least write this well and enough spare cash from the business to make an investment, or at least a write off its costs if it fails. In direct costs, its costs are about $2500 so far, mostly to have it professionally edited. I’m not billing the cost of my time, which is theoretically free. I’m hoping it will eventually turn a profit.

I began it last October and kept iterating and reiterating over and over again. In late January, I figured it was done well enough to have an editor make it more readable. I found such a woman locally who, curiously, like me, also taught at the local community college as an adjunct. She looked vaguely familiar, like I had met her in passing at a faculty or union meeting. She probably deserved more than we agreed on as her fee, but I was trying to make the book profitable, so some limited but not overly extensive editing seemed appropriate.

Even after her editing, I still went over it three times more. She can’t verify its technical content, so the onus was on me. I considered getting someone to lay out the book professionally, but opted to do it myself. My friend Tom offered to do cover art, but got too busy with his real job. So I ended up with a stock photo image.

I also ended up on Amazon, or rather its publishing arm KDP (Kindle Direct Publishing). I didn’t want to. I wanted to create a store somewhere and sell it from there. I expected that Kindle versions would have to be published via Amazon KDP. But I wanted to offer PDF and ePub versions too. I frankly didn’t want to give Jeff Bezos more money, as he looks close to being the world’s first trillionaire.

But self-publishing is still a pain in the patootie. KDP pioneered this market. You can do it all online. But it’s still a learning experience. The high hurdle to do it the ideal way gave way to my pragmatic nature. I wanted to be done with the book, at least for now, as it was beginning to eat me alive.

Still, it has been a learning experience. There is so much to learn. I feel I’ve learned maybe twenty percent of it. My main approach was to save the marketing for the end and to concentrate on writing and rewriting it endlessly. This engaged my barely controlled OCD because when I put something with my name on it, I want it to be perfect. It also engaged my writing side. Hopefully from this blog you’ve gotten the sense that I can write well and be reasonably engaging. I wanted to bring this to a technical book too. I’ve read a few of these self-published books that were crap: paragraphs pages long with atrocious grammar and run-on sentences. I’m not a technical writer, but I wanted it to be crisp and clear with plenty of illustrations, short paragraphs and pungent sentences and easy to follow.

The book should be reasonably financially successful with time. I know the market and I know there are people who need to know what I know but can’t afford me. So I’m advertising it on my website, and took out some Google search ads. Not sure how well I am doing, but my cost per click is currently 36 cents.

As for the publishing formats, I’m offering both eBook (Kindle) and paper. Publishing it as an eBook revealed a few issues with Amazon’s Word to Kindle parser. Images placed on the side around text didn’t lay out right. I need to fix that, when I can find the energy. Amazon won’t let you charge more than $9.99 for an eBook, so the royalties amount to maybe half of that. I’m going to have to sell a ton of eBooks to make a profit.

I’m also offering a paperback edition. Amazon does publish on demand. Laying it out though brought out a lot of complications. People don’t buy books sized for 8.5 by 11 inch paper. With many illustrations I needed enough width so they could be read, and since most were screenshots, the paper had to be pretty wide. I decided to use the Dummies book at a guide. It uses 7.5 by 9.25 inch paper. Printing it in full color is basically cost prohibitive as it would cost more than $40 for its 339 pages. But a black and white version is profitable. Amazon suggested $14.99 for a price. I made it $19.99.

But so far since May 6 when it was released I’ve sold exactly three copies, all eBooks, so if it’s going to be profitable it’s going to be a long-term challenge. Some good reviews would help and maybe those will come in time. After 30 days I can offer discounts, so I’ll probably do that to see if it stimulates more sales. The nice thing is that it’s pretty easy to update the content, so I’ll probably be doing that when I find mistakes.

If you have any suggestions on how to do better marketing, please leave them in the comments.

We need some means testing on these stimulus payments

Obviously, our nation is going through a crisis at the moment. With a real unemployment rate probably at twenty percent, and with about one third of renters not paying their rent (probably because they can’t afford to do so), things are pretty awful. It’s made more awful by overburdened state unemployment systems that are rapidly running out of money, and so many newly unemployed people finding it impossible simply to file for unemployment. Phone lines and unemployment offices are jammed.

So sure, I get it. Lots of people need to be bailed out by Uncle Sam because this pandemic is not their fault so they don’t deserve to be thrown into poverty. There have been three bailout bills already, which seemed more focused on bailing out businesses than people. We got our $1200 per person one time deposit of free money.

There is talk that new legislation should give each taxpayer $2000 each per month to do things like pay the rent and buy food. I suspect a lot of these people would make more unemployed than employed. That’s not to say these payments are overly generous. $2000 a month is just $24,000 a year. Assuming you could get this for a whole year and had no other income, you are making twice as much as you would in poverty. But our poverty level is surreally low: $12,760 for an individual in most states, and that won’t even pay your rent. So $24,000 a year is probably something close to a living wage. Well, no, not really. If a $15/hour minimum wage law took effect, it would amount to $31,200 a year. $24,000 amounts to $11.53/hour with a forty-hour workweek. By the way, the official minimum wage in the United States is just $7.25/hour or $15,080 a year, which is above the official poverty level, but obviously not enough to survive on, which is why at least until recently lower wage people shuffled two or three jobs each.

The proposals though are to give everyone earning less than $130,000 a year $2000 a month. For married couples like us, we’d get $4000 a month. As best I can tell there doesn’t seem to be any “buts” in the proposed legislation. Not everyone of course is unemployed. I’m betting if you make $100,000 a year, you are not one of them. It certainly is possible, but it’s unlikely.

It gets absurd though. My wife and I are retired. We each have a pension and I also draw from Social Security. My wife isn’t old enough yet to get social security. I also have a reasonably hefty 401K to supplement our income. Oh, and we don’t have a mortgage. It’s paid off, along with our cars. I do some consulting put it’s purely voluntary, and it’s not a huge amount of money. Anyhow, we are both effectively retired and completely debt free with well padded bank accounts. Yes, I am aware how unusual this is and how lucky we are. But unless our pension system gives out, we have no financial worries for the rest of our lives. Yet, the proposal is still to send us $4000 a month.

It’s crazy. I certainly understand and support the general idea that most people aren’t like us and live paycheck to paycheck. But if your family is already making $100,000 or more a year and you remain gainfully employed, you shouldn’t need much if anything in the way of government subsidies. The cap should be much lower, and the amount should be reduced for those with higher incomes, if they get money at all.

What did we do with our first stimulus checks? We gave it away to people who needed it. We both have friends in need. I gave my $1200 to my friend in need, and my wife gave her $1200 to her friend in need. Both needed it a lot more than the $1200 each they got.

Giving it away though wasn’t a hard decision. We obviously hadn’t earned it and we didn’t need it at all. We were doing exactly what the government should have done if we had something resembling a functional government: putting the money where it would do someone who needed it actual good and would also be quickly spent and stimulate the economy. Throwing money indiscriminately at a problem like this is so incredibly wasteful. In our case, the money would have gone into our already well-padded saving account, or maybe used to buy some undervalued stocks that will hopefully translate into a more well-padded investment portfolio when stocks recover.

Oh, and speaking of stocks, we were proactive there as well. If you follow my blog, you’ll see I moved stocks to bonds near peak market in February. In March when stocks were cheap I moved some money from bonds to stocks. And today, looking at the absurdly inflated value of stocks with an official 14.5% unemployment rate and a real solution to the pandemic at least a year away, I captured some of those gains by moving them back to bonds. We’ll see if I’m right and another market mini-crash is on the horizon.

I literally can’t think of a way to spend it. We have two paid off cars, one bought for cash a year ago, the other bought in 2011. I’m obviously not going to take on a home construction project, at least indoors, not with COVID-19 rampant. And our house is less than five years old anyhow. It was built to suit our needs. I can’t go to the mall and buy stuff; it’s closed, as are most stores. I could buy stuff online, but we don’t really need anything and in any event it would be hard to spend $1200 each per month online to buy stuff. I’m not sure where we’d put it. I can’t take a vacation. There is nowhere to go and even if I can get there, I’ll be eating takeout. There’s not much else to do but ride this thing out in the comfort of our nice paid-off home.

I’ll be gob smacked if this proposal moves forward as is. If we’re going to get $4000 a month on top of our already super comfortable lifestyle, I’m not sure what we’ll do with it. We may give it away to those who need it more than we do again.

But really, smarter legislation is needed. Before getting a payment, under penalty of law you should have to assert that you need the money. You should document your unemployment situation, your dependents, and your approximate monthly expenses and provide a range of your saved assets. You should sign your statement, probably electronically using maybe your IRS PIN numbers. Then you should qualify for one of these payments. When your employment situation changes, you should be required to re-file within thirty days to reduce or eliminate your payments.

I’m all for helping those who need it, but I’m against this wholesale rape of the U.S. Treasury from those like me and doubtless many millions of others that don’t.

Chaos causes more chaos

For those of you pining for anarchy, look around. Happy yet?

You should be ecstatic. For the rest of us, it’s feeling a lot like hell. Yesterday’s job report showed a 14.5% unemployment rate and more than twenty million newly unemployed people. The real unemployment rate is likely above twenty percent. Meanwhile, civil society is getting increasingly uncivil. Although less than thirty percent of us want to stop social distancing, those thirty percent are making a huge ruckus. They want to go back to the way things were, as if that were suddenly possible. Who cares if it kills grandma? Real freedom means being able to eat a Big Mac at 2 AM.

A few dozen of these idiots were protesting locally in Northampton, Massachusetts on the Coolidge Bridge, which spans the Connecticut River. The good news is that Massachusetts’s idiots are not quite a stupid at Duval County Florida idiots; some of who are rubbing shoulders on Jacksonville area beaches. About half of our protesters were wearing masks and at least attempting to keep a social distance. I hope they got it out of their system and returned to staying at home. We’ve managed to plateau COVID-19 infections here locally. It wouldn’t take too many of these protests to push the rate up again. And these idiots would be some of the most likely to contract the disease, and show Darwinism in action.

We spend billions of dollars a year supposedly to mitigate the risks for pandemics like we are experiencing. This crisis has revealed how poorly these agencies are doing their jobs. The Centers for Disease Control apparently has a set of guidelines for more safely opening up local economies. But they won’t see the light of day because the Trump administration won’t let them publish them. The part of our government that is supposed to function, the Executive Branch, is being held hostage by a constantly vacillating “president”. Voters elected Donald Trump because he was going to bring change to Washington.

Well good news there! Trump has brought change to Washington. He’s changed our government from one that often worked in the interests of the people to one wholly captive to his constant changes of mind, mood swings, tweets and general obnoxiousness. He has no idea what he is doing because he has spent his career running things chaotically. And his narcissism makes him impervious to criticism.

He’s a seventy-something Calvin (from Calvin & Hobbes), still in his terrible twos. I was all for his White House COVID-19 task force shutting down. They weren’t doing anything useful anyhow, because doing something requires a plan. Trump is incapable of adhering to any plan and will change his mind on a dime if he thinks it will improve his reelection prospects. The result of course is chaos. A chaotic mind with power is bound to cause a lot of chaos.

So of course we’re not doing the sensible stuff other countries have done to get them out of their COVID-19 quagmires. The USA has 5% of the world’s population and as of today 32% of its reported cases, and the number of reported cases vastly undercounts the likely number of cases. We also have 28% of the deaths, also probably vastly understated.

The testing that we are actually doing is a tiny fraction of the testing needed to determine whether it is safe to reopen local economies. There is no coordination or marshaling of resources so the pandemic can be fought logically. Trump finds it convenient to push responsibility onto the governors. It’s easier to do this than think and plan, things he is utterly incapable of doing. And of course, it allows him to blame others. Meanwhile his son-in-law Jared Kushner has been trying to deal with the issue by getting unpaid interns to dial around for masks and personal protective equipment. They have no experience in this and have proven ineffective, but neither does Jared Kushner.

We do have this entity called the Defense Logistics Agency whose mission is to adroitly find, marshal and distribute supplies just for things like this. It has 26,000 people trained to do exactly this who could be put to work. Logistics though is anathema to this administration. Logistics implies thought, order and planning. It’s quite likely that no one in the White House even knows the DLA exists. If Trump wanted to help his reelection prospects, he could put a general in charge of the effort then shut up about COVID-19 and let the professionals do their work. But of course he can’t. He will vacillate on anything. The DLA’s role in this crisis is ancillary at best.

Trump likes to say that nobody knows more about X than he does. The truth is just about anyone, even you, know more about X than he does. I suspect any of you reading this could do a better job of managing the procurement of nasal swabs than Trump or Jared Kushner. In fact, when Trump says nobody knows more than me about X, it’s a sure sign his narcissism is acting up again and he feels the need to cover for his deficiencies. Nobody knows more about nuclear proliferation than Donald Trump, someone who hardly ever reads. Yet some of his supporters actually believe this stuff. The truth is, Trump is dumb as dirt. By applauding this idiot his supporters are revealing they should be considered dumb as dirt too.

Trump’s one skill is simple carnival barking. He knows how to throw up a show. He knows how to entertain. He knows how to project what he wants to project. He gives his supporters what they want: validation, outrage and entertainment. Unfortunately for the rest of us, we need competence and true governance, something he is incapable of.

The result is the chaos all around us: twenty million unemployed and a country rapidly devolving into third world status. If that’s what you voted for, congratulations. Trump is doing a great job.

The Iowa caucus and New Hampshire primary have been demoted

The 2020 Democratic nomination process pulled a surprise this year. It showed that doing well in Iowa and New Hampshire probably doesn’t matter anymore.

Doing well in Iowa has been a great predictor of eventually winning the Democratic Party nomination. With the exception of 1992 when their incumbent senator was in the primary, banking Iowa proved to be the momentum that carried over to the nomination. Iowa sends only 41 delegates to the national convention, out of 3979 pledged delegates. That’s about one percent of pledged delegates. New Hampshire’s track record of being the first primary state is much worse than Iowa’s, but it picks only 24 delegates. Nonetheless, until now, it’s been an easy decision to decide to invest heavily in Iowa’s caucus and the New Hampshire primary as well. They set a candidate’s narrative on their eventual electability.

Biden won only six of Iowa’s 41 delegates and no delegates in New Hampshire. Yet he’s going to win the nomination in a landslide. What went wrong?

South Carolina went wrong, or perhaps right. Biden won 39 of its 54 delegates there. South Carolina Democrats of course are mostly African American voters. This time around, South Carolina set the narrative on who the nominee would be, surprising pretty much everyone, including the Biden campaign. Biden won ten of the 15 Super Tuesday states, held just four days later. South Carolina effectively set the narrative this time around, and African Americans showed and have emerged as the Democratic Party’s principle power broker.

The lesson from this should be obvious: if you want to be president, you should spent a whole lot of time and resources in South Carolina and a whole lot less in Iowa and New Hampshire. And if you want to win South Carolina, not only do you need to spend a lot of time there; you need to invest much of your political career to working on issues that African Americans care about. Also, those who discount the savvy of African American voters do so at their peril.

Biden was assumed to be the front-runner before any voting started. Polls generally gave him the edge. It’s just that many of us didn’t believe the polls. Joe looked bland and tired, and we found it much easier to be enthused about progressive candidates. I was enthused about Elizabeth Warren. I still am; she’s just out of the race now. So many progressives like me were hoping to convince principally non-white voters to vote for our favorite, but the biggest voting bloc in the party decided they wanted pragmatic Joe instead of ideological Elizabeth or Bernie.

Biden did it despite the plethora of mainstream candidates that included Amy Klobuchar, Pete Buttigieg, Kamala Harris and Mike Bloomberg. He did it on a shoestring budget. While early and principally white voters found things to like about these candidates, the party’s African American bloc did not. They signaled to other minorities that form what is now arguably the core of the Democratic Party who they should vote for. And primary voters listened, trusting their instincts more than the traditional white base of the party.

This election’s primary process then seems to suggest a new era for the Democratic Party: as the party principally of African Americans and other minorities. This leaves progressive whites in an awkward place because we seem to vote disproportionately for progressive white candidates. A few will cross party lines and vote for Republicans and Trump instead, but most of us will have to rethink the optics of our voting choice. We need to realize that our power and influence in the party is diluted and is likely to remain this way in 2024 and beyond, and that minorities are the party’s new majority.