The theme of this blog, which admittedly I often stretch and occasionally just ignore, is that the money advice we Americans get is lousy.
That advice comes from several sources. There are publications and 
broadcasts of various kinds. Aside from often lacking much wisdom or insight, these sources of information suffer from the fact that they are aimed at a broad and anonymous audience. By their nature, they are one-size-fits-all, leaving individuals to work out for themselves any customizations that might be required. On the other hand, this advice is free or nearly so.
More near-free advice can be had from friends and relatives. Some of this is probably good, but given the general state of PF knowledge out there the chances of hitting on a gifted amateur with sound ideas is low.
At the top of the advice food chain are professionals who give advice to particular individuals, presumably based those individuals’ situations, in exchange for money in the form of fees and/or commissions. In principle, that ought to work best and I have no doubt that there are many paid advisors out there who do a great job. But I am also pretty sure that many others, maybe even most others, are not up to snuff.
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The Consumerist is, according to a popular ranking, the #1 personal finance blog. I am not sure that it fits cleanly into the personal finance category but there is no denying that it is a monster in the blog world, linked to by 8,865 other sites. (For context, this blog has 89 inbound links.) I read it every day.
A post last Friday, written by the Consumerist’s managing editor, ~600,000 Chinese Die Making Our Shiny Toys caught my eye. To save you a click, here is pretty much all of it, links included.
Let’s expand our foreign language vocabulary! Can you say, "guolaosi"? It’s a Mandarin word meaning "death from overwork!" The word describes the phenomenon of Chinese workers falling dead on the spot as they toil in sub-Dickensian conditions so you can save a dollar on your next laptop!
China Daily, an English-language state-run publication, says an estimated 600,000 Chinese workers die each year in this fashion, sometimes falling "off their stools bleeding from the ears, nose and anus," as left-leaning mag The Nation reported in 2007.
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It has been months since I last shared confusion over the way everybody else uses credit cards. Today I am back at it.
Over the weekend the New York Times had a report about a new feature
being rolled out by MasterCard and Citigroup. (By which the Times means Citibank.)
The service, called inControl and already in use by some Barclaycard holders in Britain, is a sort of financial chastity belt that offers the potential to prevent a variety of budget sins and other money traps.
Worried about your restaurant habit? If your bank adopts MasterCard’s service, you could tell it to have your debit or credit card reject any restaurant purchase above whatever monthly cap you set.
I must admit I do like the name of the product. “inControl” neatly implies that without it you would be “outofControl” and I think that if this service appeals to you that is likely true.
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With a coordination that I am sure both found embarrassing, The New York Times and The Wall Street Journal both ran stories on Saturday with tips on how to deal with a bout of deflation.
This raises several questions. Do we expect deflation? If so, why? What is deflation, anyway? Why is it so bad? Is the advice from these two giants of the mainstream any good? And what was it about last weekend that inspired them to write about, of all things, deflation?
That’s a long post’s worth of rhetorical questions. So, without further ado, let’s dive right in. Personally, I do not expect deflation in the near term, at least not enough to notice. Whether or not it is expected, or even seriously worried about, in the larger investment community is a harder question to answer.
The WSJ opens its piece telling us that “The markets are signaling that a bout of deflation may be coming.” But the only market indicator cited is a rally in bonds. True, the yield on 10-year Treasuries is down this year, although it is up from where it was at the end of 2008. And yet a rally in bonds is not exactly an unambiguous statement about deflation. The bond market goes up and down all the time. Why is this rally a deflation prediction?
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SmartMoney carried an item the other day about how, according to a new survey, those crazy kids have found another way to act foolishly. They are 
taking less risk with their investments.
The factual basis for believing that younger people are taking less risk is a little thin, a single question on a survey of affluent Americans (Aflo-Americans?) done by Merrill Lynch. Still, it confirms my previously held beliefs and even fits into predictions of the future I made more than a year ago, so I am going to go with it.
52% of those under 34 described themselves as having a low risk tolerance. That is more than either the 35 – 50 age group (45%) or 51 – 64 group (46%). Only the oldest, and presumably retired, 64+ group came in at a higher rate of low tolerance, at 55%.
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broadcasts of various kinds. Aside from often lacking much wisdom or insight, these sources of information suffer from the fact that they are aimed at a broad and anonymous audience. By their nature, they are one-size-fits-all, leaving individuals to work out for themselves any customizations that might be required. On the other hand, this advice is free or nearly so.
Expert Advice, Housing, Media | Frank Curmudgeon | 
August 25, 2010 12:59 pm | 
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