Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure, than to take rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows neither victory nor defeat.

Theodore Roosevelt, The Strenuous Life

October 24, 2010

Money and Finance, Opinion

1 comment

After a brief hiatus, mortgagees and holders of trust deeds are pursuing foreclosures once again. The problem for the lenders came to light based on the work of conscientious lawyers like Thomas A. Cox, according to the New York Times (October 15 front page story). He deposed a GMAC Mortgage employee who submitted false certifications to the court. Apparently, the court did the right thing, dismissing the claim without prejudice. That simply means the plaintiff’s claim is tossed out of court but he can bring the cause again. The court has no choice if the allegations of the plaintiff are not properly sworn, because pleadings are essential to jurisdiction, and false ones are insufficient to create it.  Foreclosures stopped first in states requiring judicial foreclosures, then the banks stopped them across the nation to verify the accuracy of their work. Apparently they feel comfortable now based on statistical analysis of accuracy, and are again proceeding.

The State of Washington is one of the states that provides a frequently accepted option of a non-judicial foreclosure using a trust deed. The lender gets an expedited and simple foreclosure but gives up any excess judgment. In fact, I have yet to see a mortgage in this state; most folks borrowing for property convey a trust deed in return for the funds loaned.

What seems to be missing from the news reports is criminal charges against the employees certifying under penalty of perjury that they are reasonably certain of the accuracy of the pleadings, when in fact they have not read the documents and verified the facts. A few perjury convictions against the individuals and their employers would be the correct course. Having anyone submitting false pleadings and other documents to courts causes undue expense, lengthens the time needed to resolve legal issues, and is very tough on opposing parties. My guess is that perjury is generally flagrant in Washington State trial courts and is substantially encouraged by infrequent prosecution of the offense. Perhaps this is the case across the whole country, a part of that moral decline folks speak of.

Winter is approaching and cold weather is here already. I often build a wood fire in the evening or morning, heat the open area of the house, then turn on the furnace fan. The return air grille is high in the vaulted ceiling not far from the wood stove, allowing hot air generated from the wood stove to spread through all rooms of the house. About two weeks ago, I switched the fan on and nothing happened.

My diagnostic approach was elimination of potential failures, doing the easy steps first. I learned on line which thermostat wires controlled the fan, removed the thermostat from the back plane, and crossed the two terminals (red and green). The fan didn’t work. This proved (almost conclusively) that the thermostat was not the problem. I then shut off power and  checked the blower and motor. There was no evidence of a burned motor or shaft failure; the squirrel cage turned freely. I bypassed the fan controls and energized the blower leads. The fan worked, proving the starting capacitor and the motor were fine. I then turned the power back on and heard a relay operate on the fan control board. I concluded that the transformer was alright and that the fan control board had failed.

I searched the Internet, simply inserting the old part number into the Google search box. My first hit was a used board on e-Bay for $199. The second was a new one for $187. Information on that site revealed that the part had been replaced with a “universal” fan timer. (Universal is an industry term for a part that won’t fit like your old one.) My third search was a great site that was clear. They offered the new universal part (the part number is in the title) for $104 plus $10 shipping. My wife ordered it standard shipping; we have a wood stove so there was no rush.

If you undertake this job yourself, do read the directions before you start. They include the advice of removing the mounting screws of the old board and installing the new board before disconnecting any wires from the old one. This is sound advice. I used a big cable tie to hold the old one out of the way. You should move the leads one at a time and have a high confidence that each is properly connected before moving to the next. Here are some other pointers:

  • Find the part number for your old board in the dip switch setting  table of the instructions in case your appliance is not listed in the directions.
  • The dip switches are covered with a brownish translucent protective cover. It is not obvious, especially if your eyes are older than an antique car. Remove it before attempting to operate the dip switches.
  • I used a utility knife to set the switches, using a lateral and slightly upper force on the switch.
  • The new board’s terminals are in different positions. You will think that all the leads are sufficiently lengthy to fit the new board, as I did. I was wrong. I mounted the new board in a different position, had to move the transformer, mounted the board upside down and moved the ground terminal on the furnace chassis to get it to fit.
  • The neutral terminals are all identical. Connect the white wires to them.
  • IND is the label for the combustion air fan. Honeywell calls it the induction fan. Connect the black lead from the induction fan here.
  • The common on the secondary side of the transformer is defined by its connection to ground with a dual lug. It goes to the common transformer terminal. The other secondary lead is X1. These are both 24 Volt leads and connect at the low Voltage side of the board.
  • The safety interlocks were on the six wire plug on my job. The wiring did not match the “typical” diagram. It had 4 terminals in use and mine had 5. However, the four they showed were connected similarly through normally closed interlocks and the fifth was shown connected identically to my furnace on another wiring diagram. Voila.
  • Connect the black power wire from your supply circuit to the L1 terminal.

The universal board has simple on-board diagnostics, with a green LED that shows normal operation and displays trouble codes. I didn’t see the trouble codes; mine worked perfectly when tested. This includes success with pre-purge (combustion air fan goes on before spark production to purge any explosive mixture prior to the generation of the spark), ignition, blower starting after ignition, flame going out when thermostat is satisfied, and the blower operation enduring for a short time to cool the heat exchanger after the flame goes out. Of course, my fan switch starts and stops the blower as it should.

My guess is that this do-it-yourself effort saved about $100 in parts and probably $200 in labor, yielding roughly a savings of  75% . This is enough for great dinner with fine wine for two, lots of gas, or some darn necessity. I also avoided the sales pitch with the mechanic arguing that my 16 year old furnace should be replaced because it isn’t that much more money. The truth is that I need new ductwork, so a new furnace and the needed duct improvements will cost about $10,000.  That’s the subject of a future post.

The Seattle Times reports today that the federal government is proposing fleet average fuel economy of 62 miles per gallon by 2025. This is greater than the performance of a Toyota hybrid (about 45 mpg), or a Honda Civic with a stick shift, which gets anywhere from 32 to 39 mpg depending on the gasoline blend, driving habits, and the season.

The article also reveals that the standard will be higher for heavier vehicles, and quotes speculation that technology improvements in the next 15 years will get us there. Even more impressive is that the governors of several states, including Washington, support the change. Having our governor, an attorney who I am sure knows a great deal about cars, engineering and physics, favoring this imposition on the American public is heart warming.

Here are the likely effects:

  • All vehicles will become more costly, because the lighter materials needed to build new cars are more costly than steel.
  • The ratio of plug-in electric vehicles as compared to gasoline based vehicles must increase to roughly 50% of the American vehicle fleet.
  • Pick-up trucks and vans that are gas fired will be very expensive. You will pay for this when you hire contractors through higher overhead, even if you do not own one.
  • The richer you are the less the effect. You will be able to have a larger vehicle with lower fuel economy. The corollary is that lower income folks will drive old clunkers that consume lots of expensive fuel.
  • Gasoline fired vehicles will be more costly than plug-in electrics, but plug-in electrics will be more costly than they are now.
  • The roads will be more jammed with more vehicles than they are now. But don’t worry because you won’t be burning fuel while you are parked on the local interstate highway. Also, those governors who signed letters of support for the rule change will be retired when the rule goes into effect.
  • Like conservation efforts that have been made since the oil embargo of 1973, the U.S. reliance on oil and oil imports will not decrease under this kind of rule.

The local papers ought to actually reveal what a rule like this will do. Then people can understand the consequences and not draw the unlikely conclusion that technology will cause a vehicle like they have parked in their driveway today to perform about three times better in 2025. I could support policies that encourage the purchase of plug-in hybrids and their use in inner cities. I can even support closing urban cores to gas powered vehicles. There are reasons to do so. I do not support trying to achieve the same ends with the proposed subterfuge.

Also, it is time to defeat the Democratic legislative majorities, not because the Republicans have great ideas. We need to slow the rate of change and pass fewer laws until a political party emerges that actually can lead in these challenging times.

August 19, 2010

Money and Finance

Comments Off on Two Kinds of Money

If asked to simplify personal finance in a few paragraphs, perhaps describing money as either freedom money or treadmill money would do the job.

Treadmill money is used for recurring expenses, whether the obligation is mandatory or arises from a note or other obligation you voluntarily or even foolishly incurred. It is income taxes, mortgage expenses, insurance expenses, child support and other court ordered payments such as traffic fines. It even includes the amount you save regularly; the obligation is to yourself (that’s why so few of us save enough; doing so is a matter of discipline). Repayment is a recurring obligation to a specific entity. There is little freedom in that.

Freedom money is the cash you have in your pocket, or available for immediate payoff of the credit you use. It even includes money used for the purchase of food and other necessities; you have exercised choice in what you buy, from whom you buy it, and when you buy it. You have almost total freedom with that particular expense.

The most detailed advice of the best financial consultants can be translated into something very simple. Drive down your treadmill expenses so that you have enough freedom money to satisfy your needs. Having the treadmill absorb too much, through mortgages, car loans and credit card debt may be okay if you have a lot of patience and continue to reduce debt without incurring more, but it is absolutely dull and boring. My observation from personal experience is that the drudgery of debt repayment is far worse than the instantaneous pleasure of a purchase on credit, even for houses and cars.

Although the idea mentioned above struck some as accurate, my wife remembers one boss who took great pleasure in simply being able to pay his bills as they became due because his parents struggled greatly to pay for the necessities of life. His “treadmill” expenses created a thrill so that the distiction between treadmill and freedom money was irrelevant to him.

August 10, 2010

Miscellaneous Comment, Money and Finance, Opinion

Comments Off on Rhino Linings

Rhino sells franchises for the application of linings for pickup trucks.  They promote their product with a “lifetime” warranty that turns out to be virtually useless.  This is a lifetime warranty for a product with a useful life of perhaps as few as five to ten years, depending on the severity of service. Pieces of mine are disappearing all over my truck bed. Some of the limitations to the Rhino warranty are:

  • Repair must be with the installing dealer. Mine went out of business years ago. Persons in my situation are instructed to make a claim at a warranty website and to include photographs of the failure. I could not find the website to which the dealer I called referred me.
  • If Rhino thinks your claim is valid, Rhino will have the dealer closest to where you live evaluate the failure. The closest dealer to me is 40 miles away. If they agree that the liner has failed in a manner that is subject to the warranty, I will get an approval and an appointment for another 80 mile round trip. So success means 160 miles of driving. That is roughly $80 in driving costs alone.
    • There are also different warranty limitations in my contract than noted on their website. Current coverage is limited to cracking, bubbling or peeling. My warranty excluded abuse and misuse.

    I specifically recall the dealership telling me at the time of purchase they would fix any failure, but of course that is not what the contract states.  Do you think there is a potential argument about what constitutes abuse of a bed-liner? This is a product we buy to protect the steel bed from abuse like sharp objects in trash or excessive wear from rocks and gravel. This is not a purchase based on style.

    My advice is simple. Be careful of companies offering lifetime warranties. View these warranties as an annoyance; why should they pay for repairs or replacement of a product that is beyond its useful life? You do not think that is smart and they do not either. Therefore, they will likely make the success of your claim difficult. Lifetime warranties are often the signal of a company willing to abuse consumers, like Rhino.

    You might want to consider a truck with a factory composite bed, such as the Toyota Tacoma, or a competitor to Rhino if you select a sprayed-on liner. Or simply save your money, sand the scratches that eventually accumulate in the painted factory finish, and roll and brush some top quality coating in the pick-up bed when it is needed. After all, it’s a truck.

    July 27, 2010

    Current Events, Money and Finance, Opinion

    Comments Off on Warnings on Deflation

    The Seattle Times featured an article today once more trumpeting the evil of deflation, buttressed by quotes from Paul Krugman and other brilliant economists. I have a simple question. Aren’t the general rates of inflation or deflation irrelevant to the predicted ills of deflation if the absolute value of any general change in currency value is small? When the currency’s value is relatively stable, whether it is rising or falling moderately,  some prices are falling while others are rising. This in and of itself is not a doomsday scenario; we are already witnessing it. Every property owner in the U.S. knows about real estate deflation in the past two years. We also know that this decline in prices makes perfect sense following the inflation in prices that had occurred for decades, especially following WWII. The recent decline, while tragic for speculators, folks borrowing under unreasonable terms, and many innocent owners with bad timing, is a correction caused by housing industry folks who had been promoting purchases that made no fundamental sense. The lenders, real estate brokers, bankers, and appraisers were not engaged in productive work that benefited everyone anymore.

    Economists seem to dwell on irrelevant numbers while forgetting the important things:

    1. Are we producing and contributing to society in a positive way?

    2. Do we have wise economic and tax policies that preserve incentive while providing suitable safety nets that are compassionate and yet do not destroy motivation?

    3. Are we using resources wisely and not depleting our land, minerals, waterways and forests?

    4. Is defense spending enough to protect us but small enough to not defeat the other important goals of our society?

    5.  Is trade in balance? Are U.S. wages competitive to permit international trade to perform as it should?

    These are the economic issues on which I think we have been in trouble on for years and on which we should all focus to improve our lives.

    July 11, 2010

    Money and Finance

    Comments Off on Nagging Creditors

    My wife and I switched to Comcast VOIP phone service almost one year ago. We were the unfortunate recipients of a number previously assigned to a deadbeat named Rosanne Schrader (I am unsure of the spelling). Ms. Schrader did a lot of business in town with medical care facilities, Blockbuster, and other entities but did not set a high priority on paying them. The result was 5 to 10 calls every day from creditors for the first month of acquiring the service from Comcast. Most of the callers have accepted our explanation that Rosanne is no longer associated with the number they are calling, and removed us from their calling list. A few cannot be reached because they are “robo” calls. Even fewer have politely agreed to remove us from their lists, but have not done so. The bottom line: we get about three calls per day from creditors with whom we have no association despite being on the do not call list. One of the annoying callers is a charity that may not have had a relationship with Ms. Shrader: ARC of Washington. They just won’t stop calling despite agreeing to cease calling on at least two separate occasions. We have hung up on these callers, pleaded with them, and let the phone ring. Nothing works.

    Several things about our experience make me wonder how many debtors actually pay their bills because of calls from creditors. My rule is never pay anyone anything who solicits money by phone. The one exception is not charities – they never leave you alone if once successful. The exception is a friendly reminder from a creditor who you have actually forgotten to pay, or to whom you delivered a bad check accidentally.

    It is indeed a challenge to benefit from modern technology while avoiding its associated burdens.

    July 7, 2010

    Miscellaneous Comment, Money and Finance

    Comments Off on On PVC Pipe

    PVC pipe is great for irrigation and other uses. However, there are two material pitfalls to avoid that I learned the hard way. In small pipe sizes, as used in the home, Class 200 pipe is always thinner than Schedule 40. Schedule 40 is always worth the price premium. There is a convenient one part primer and solvent. It is terrible.

    I was trying to repair an irrigation header. The fifteen year old Class 200 pipe deformed so badly before my cutters would penetrate that joints fastened with the one part primer and adhesive failed. I must replace the entire header.

    In short, use Schedule 40 for piping, primer for priming, and the solvent welding compound for joinery.

    June 6, 2010

    Money and Finance

    Comments Off on Op Ed Piece in The New York Times, May 27, 2010

    Please read David Einhorn’s editorial, Easy Money and Hard Truths. The bottom line is you need not worry about the impact of the national debt on our children. His view is the time of trouble is sooner than that. Here is the link:

    http://www.nytimes.com/2010/05/27/opinion/27einhorn.html

    June 6, 2010

    Money and Finance

    Comments Off on What Will We Buy From Comcast?

    My wife and I are almost midway through a two year service contract for cable television service, broadband service, and telephony services from Comcast. The contract set the package price at $99 and required us to remain connected for the duration. They threw in a free netbook, and provide various goodies like free calling throughout the U.S. and Canada, and free Norton suites for all three of our computers. It is a good deal for us.

    There were two unpleasant surprises, probably aggravated by my failure to read the fine print: (1) The service is really more costly than $99 per month. They nick you for taxes and fees that are incessantly increasing. The bills started at about $107 and are close to $110 per month now. (2) I thought the installer would bring the netbook with him. Hah. I called and learned it would be about 90 days. I then made arrangements to make sure they would deliver it to my private mailbox. They said that would not be a problem as long as my bill went there. That was fine with me.

    So, sometime after 90 days, by wife and I noticed a box atop a gate post about half a mile from our home. It was our netbook that had spent a night in freezing temperatures. It was one of those cold, winter nights we get in this hill country when the skies are clear. Fortunately, the carton was not saturated, just cold. We let the netbook warm before turning it on so that there would be no condensate, and it worked fine. (The gate was not even locked and the delivery service could have come down to the house. I hate UPS – but that is another story.)

    Due to a bad neighbor, there were several years when anything left at the gate like that did not get here. We sued the bad actor. That, the passage of time, and his demise from a dread disease that you would not wish on your enemies resolved that problem. But that is another story, too.

    We will within a year decide what to do with our Comcast service. I have heard they have a very basic television service that would likely work well for us; 95% of our viewing is channels 9 and 12. My wife enjoys the weather channel, and we like a few things that are found on commercial channels: 60 minutes, the Olympics, the Indianapolis 500. My hope is to have basic cable, Internet and telephone service. If a modestly priced package is not available, it will be an internet and telephone package. If that package is unreasonable, it will likely be that we will buy just the Internet access.

    Another factor on the telephone decision will be the availability from Verizon of an Internet interface for our mobile phones. Those are available in at least some areas. Successful deployment of one of those will get us off the home-based line and move us to Internet only from Comcast.

    Rich

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