Regular readers of Bad Money Advice will not be surprised to hear that I prefer numbers to words. (Allegations that I prefer computers to people, however, are greatly exaggerated.) I think this is a natural inclination. Any halfway thoughtful 
person favors evidence over feeling, and numbers have the appearance of being hard facts.
But not all published numbers are factual, even when widely repeated in respectable places. Which presents a difficulty for us lovers of digits. How can we separate the real from the realish? Not to worry, because today I am revealing for the first time my Law of Numerical Fiction which will help identify the imposters.
To be successful, that is, repeated widely as if it were true, a fake number must satisfy three criteria.
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There is a very amusing site that bills itself as "entertainment shopping" called Swoopo. After a brief investigation, I have concluded that:
1. You would have to be a complete idiot to spend money on this site.
2. I am a complete idiot for not thinking of it first.
How Swoopo works is deceptively simple. They auction off desirable items such as notebook computers and big flat screen TVs. But the auctions have some very special rules. It costs $0.75 to place a bid. Bids can only top previous bids by a certain small amount, usually $0.15 but in some cases only $0.01. There is no fixed end time for the auction. It continues until nobody has bid for 20 seconds.
Get it?
This is an amusingly profitable deal for Swoopo. Although they wind up selling the merchandise for much less than it is worth, the bidding fees collected swamp the small loss involved. For example, yesterday morning the bidding on a Sony Playstation 3 worth (Swoopo tells us) $399.99 sold for $126.60. That’s a nominal loss of $273.39 from retail. But to get to $126.60 in $0.15 increments took 844 bids, representing $633 in revenue to Swoopo. Brilliant.
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On Monday the New York Times ran a piece that, in a better world, would not have been news. Turns out that credit card companies are often willing to settle delinquent accounts for less than what is owed. Golly.
The article did contain an important tip for those in serious credit card trouble. When the card issuer calls you out of the blue and offers to let you 
settle the whole thing for 80 cents on the dollar, you should, without hesitation or reflection, say no. Then hang up. They’re not calling because they think you’ll pay them eventually. That 80% is what we Wall Street types call a “first offer”.
The Times piece tells the story of a guy who got a call like this, said no thanks, and then when the company called back a few weeks later, offered them 50%.
It’s a deal, the account representative immediately said, not even bothering to check with a supervisor.
Where I come from, the account rep would be considered very rude. Proper etiquette would have been to put the customer on hold for thirty seconds while pretending to beg a supervisor to okay the deal. At the very least, the rep could have heaved a big sigh and mentioned something about how will probably be fired for this.
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Last week the New York Times ran an installment of its Wealth Matters column entitled How Do I Know You’re Not Bernie Madoff? Literally, it’s an easy question to answer. (Because I’m not in prison.) But figuratively it’s an
important question for which everybody with money to invest should have an answer.
The column starts out with a brief interview with a private wealth manager with the impossibly appropriate name of Tony Guernsey. (A posh off-shore banking center?) And there’s a picture of the fellow. He looks exactly as Ralph Lauren would have him look: tortoise shell glasses, chalk stripe suit, and chin thoughtfully rested in right hand. In the foreground there is (I swear I’m not making this up) a small red flag.
Tony Guernsey has been in the wealth management business for four decades. But clients have started asking him a question that at first caught him off guard: How do I know I own what you tell me I own?
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One of the things I have learned writing this blog is that I have no power to predict which topics and posts are going to be popular. Sometimes I write what I think is an insightful and even controversial post and it gets five ho-hum comments and 
no links. Then I write what I think is a forgettable few paragraphs on a unimportant topic and next thing I know there are 30 impassioned comments and links to it all over the web.
My post last week on LifeLock’s legal woes fell into the surprisingly popular category. I thought it was a modestly interesting wrinkle on a rather unexciting topic. I didn’t understand what a hot button identity theft is for some, and what a great business it is for others.
Controversy and money is a combination I can’t stay away from, so I decided I needed to learn more about identity theft. It hasn’t been going that well. It seems the more I read the more confused the picture gets and even answers to some basic questions become more murky and ambiguous the more I dig.
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person favors evidence over feeling, and numbers have the appearance of being hard facts.
Government, Media, Musings, Taxes, The Big Picture | Frank Curmudgeon | 
June 26, 2009 12:30 pm | 
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