Banksters Mine Your Social Networks

[kayaker]

Hemp head; is that a put down or a form of commendation?

[KidVermicious]

How much of this problem is the banks, though, and how much is us? Banks and insurance companies are powerful because we've made them that way. If we'd stop asking for credit and insurance when we don't need it, the problem of being taken advantage of by huge heartless corporations would get a lot smaller really really fast.

Insurance is a scam, and big-money lending is a scam. They're based on unscrupulous hacks using your money to make money. Neither is a good idea for the private consumer except in extreme circumstances, and their widespread use has completely distorted our entire economy to the point that we think we need them just to survive. It ain't true.

[Wolf Larsen]

Originally Posted by KidVermicious

Insurance is a scam, and big-money lending is a scam. They're based on unscrupulous hacks using your money to make money. Neither is a good idea for the private consumer except in extreme circumstances, and their widespread use has completely distorted our entire economy to the point that we think we need them just to survive. It ain't true.

I assume you own a house. Like most people, it's probably your largest asset. If it burns down, flies off in a tornado or floats off in a flood and you don't have it insured, you're SOL.

Do you really run naked on this risk?

[THespos]

Originally Posted by Wolf Larsen

If I were going to do this, I'd collect a bunch of point in time social data and loan history data and then use it to train a neural net to figure out which things were predictive of repayment problems and what the time lag was. I'd then validate it with some new data to make sure it still had predictive value before I let it be a weight in the underwriting equation.

This is my biggest issue with Big Data. There's this assumption of predictive value that comes along with these ideas of using social and behavioral data points to find most desirable/least desirable customers.

Vetting shit like this is part of my job. Ninety-nine times out of a hundred, these Big Data companies haven't validated their supposed predictive abilities with any hardcore evidence. Makes for some interesting meetings once you mention this, especially after having asked some fun questions about data-gathering techniques and their compatibility with established privacy policies (and the prevailing attitude toward snooping...)

[KidVermicious]

That's a pretty stock answer, Wolf, you haven't thought it through.

If it weren't for the availability of easy credit, real property like houses and cars wouldn't cost so much. And if they didn't cost so much, consumers wouldn't require lines of credit to aquire them, or feel the need to waste more money insuring them. It's a self-perpetuating distortion of the economy that doesn't go away because otherwise intelligent and right-thinking people are sheep at heart who need to feel wealthy and secure, and the insurance and banking industries have really good PR people who play on that need.

I've said it before and I'll say it again - insurance is just another form of gambling, and just like Vegas, the insurance industry has it rigged so that they will always win. The number of people in the world who have actually seen their insurance gamble pay off are overwhelmingly outnumbered by the number of people who have pissed away hundreds of thousands of dollars into the pockets of insurance executives and have nothing to show for it. How much money would you have right now if every penny you've put into insuring your house or your autos or your life had instead gone into an interest bearing account? Enough to buy a house, 2 cars, leave your kids a healthy inheritance, and still buy you a nice retirement, I'll wager. So yeah, if it were up to me, I absolutely would run without insurance. Without question, in a heartbeat.

I could see an argument for insurance if it was a coop. Once you add the need for corporate overhead and profit margins and stock dividends, it turns into a giant scam.

[Lounsbury]

Originally Posted by KidVermicious

How much of this problem is the banks, though, and how much is us?

A fair question, unfortunately then entirely undermined by an ignorant screed, reminiscent of anti-vaccination screeds in its ignorance, privileged lazy ignorance to be precise.

Banks and insurance companies are powerful because we've made them that way. If we'd stop asking for credit and insurance when we don't need it, the problem of being taken advantage of by huge heartless corporations would get a lot smaller really really fast.

Indeed. So would your net wealth and national per capita income as well (given your subsequent blithering, attaching a large value to 'credit and insurance you don't need.'). But Smash The Kulaks, always a great methodology for adolescent acting out and ignorant self-impoverrishment.

Insurance is a scam, and big-money lending is a scam

.

Amusing.

Empirical economic evidence says otherwise. Hard numbers say that economies that have little insurance and fragmented and primitive banking systems are significantly poorer as compared to peers more insurance and more developed financial sectors.

Which way cause and effect goes of course is hard to tell (one does imagine a reciprocal relationship given the evidence), but the statistical lesson that they are very highly correlated is without any question.

Of course this is the sort of exaggerated whinging that only the privileged overweight citizens in North America can write, being spoiled and ignorant, taking for granted the advantages the very insurance and financial markets being attacked have provided. (To avoid misunderstanding, that in no way precludes an observation that in USA abuses of said system occurred and the framework needs a cleaning up.)

Neither is a good idea for the private consumer except in extreme circumstances,

That has a factual value precisely the same as saying vaccinations have no value, except in extreme circumstances.

and their widespread use has completely distorted our entire economy to the point that we think we need them just to survive. It ain't true.

Actually, economic data say it is.

Else you rewind your economy to wealth levels of say North Africa or chez vous, c. 1920s.

Of course in the specific instance of consumer credit and leverage of households, particularly for acquisition of consumer goods, rather than useful assets (e.g. housing, transport), there is no doubt there is excessive use in the Anglo countries.

[KidVermicious]

Shut up, Dingleberry. I can't even see your post, yet somehow I know it's just filled to capacity with overwrought descriptions of my provincialism and ignorance, and yet somehow completely empty of anything resembling substance or common sense.

Your schtick is old. Go troll somewhere else.

[Wolf Larsen]

I don't believe cars would be much cheaper. Car manufacturers do not make much per car. (I went through the Toyota annual report with a fine tooth comb back when I owned the stock.) It's only a few hundred per car. You could make some ugly but durable cars that were somewhat cheaper, but I doubt they'd sell. Removing insurance on the vehicle itself (not your potential liability to others) would drop the price less than a set of tires.

On insuring buildings, a bunch of folks out here didn't have flood insurance and now have a total loss. I doubt they are very happy right now.

[KidVermicious]

Originally Posted by Wolf Larsen

I don't believe cars would be much cheaper.

Cars would be cheaper because they would have to be. Without running credit tabs, people wouldn't be willing to buy disposable vehicles at 40k a pop.

Originally Posted by Wolf Larsen

On insuring buildings, a bunch of folks out here didn't have flood insurance and now have a total loss. I doubt they are very happy right now.

And yet, the insurance companies still make a profit, why is that?

Pointing out individuals who happen to have used their insurance coverage doesn't prove that having that coverage in the first place is a good idea. It just means they got lucky and the money they paid for that coverage isn't entirely wasted.

[Wolf Larsen]

Insurance companies generally make their money investing the float. (I own stock in two, United Healthcare and Prudential.) Most insurance companies pay out about as much as they take in in premiums. Where they make their money is that you pay up front and they get to invest it and keep the investment profits as they pay it out later. Insurance companies are good but not great investments. UNH has a return on equity of 17% and Prudential has a current ROE of -5%. (They had a bad year.) Apple's ROE is 32%. Guess which one is gouging the consumer.

[JackieLikesVariety]

even better - a national bank run through the post office

repair the infrastructure, help those who currently don't bank (the "unbanked", hate that phrase)

there is NO downside to this

it is already working in other countries!

Postal banking systems are also ubiquitous in other countries, where their long record of safe and profitable public banking has proved the viability of the model. The mother of all postal banks was in Great Britain in the 19 th century. The leader today is Japan Post Bank (JPB), now the largest depository bank in the world. Not only is it a convenient place for Japanese citizens to save their money, but the government has succeeded in drawing on JPB’s massive deposit base to fund a major portion of the federal budget. Rather than using its deposits to back commercial loans as most banks do, Japan Post invests them in government securities. That means the government is borrowing from its own bank and its own people rather than from foreign bondholders.

[Lounsbury]

Originally Posted by THespos

This is my biggest issue with Big Data. There's this assumption of predictive value that comes along with these ideas of using social and behavioral data points to find most desirable/least desirable customers.

Vetting shit like this is part of my job. Ninety-nine times out of a hundred, these Big Data companies haven't validated their supposed predictive abilities with any hardcore evidence. Makes for some interesting meetings once you mention this, especially after having asked some fun questions about data-gathering techniques and their compatibility with established privacy policies (and the prevailing attitude toward snooping...)

Indeed. I see a great deal of assumptions about Big Data, but rather little proving it out.

Exposure to lawsuit risk (given USA habits) over unproven utility rather seems imprudent.

Originally Posted by KidVermicious

That's a pretty stock answer, Wolf, you haven't thought it through.

Amusing, this apparently means "did not engage in the magical thinking and Just So Assertions I prefer."

If it weren't for the availability of easy credit, real property like houses and cars wouldn't cost so much.

And one can see in Real World Economies without easy access to credit that the actual effect is less access to houses as there is less building, and relative to immediate liquid wealth (as opposed to time deferred) of populations, hirer effective prices.

This is all rather clear in economic data.

Of course, if globally applied, cars would not have the same economies of scale due to less demand, and industrial economics indicate they'd be more expensive, ceteris paribus.

And if they didn't cost so much, consumers wouldn't require lines of credit to aquire them, or feel the need to waste more money insuring them

.

Waste money insuring....

Brilliant.

Of course we need not speculate via Just So Assertion: we can see in Real World what the effects of not using credit are in economies where there is limited credit. Prices are not generally cheaper, they're more expensive on automobile due to lack of scale.

It's a self-perpetuating distortion of the economy that doesn't go away because otherwise intelligent and right-thinking people are sheep at heart who need to feel wealthy and secure, and the insurance and banking industries have really good PR people who play on that need.

Yes, people are sheep. A brilliant observation by ideologues of all stripes to explain why somehow the way they think things should be working does not.

I've said it before and I'll say it again - insurance is just another form of gambling, and just like Vegas, the insurance industry has it rigged so that they will always win.

This merely indicates you truly know fuck all about insurance and don't even understand the basic bloody concept. Which given what a dim bulb you are, is of little surprise, except perhaps the profoundness of your stupidity and ignorance.

Insurance is the very opposite of gambling (unless done wrong). Insurance companies for most forms of insurance build up data on statistical expectations There isn't a question of winning, it is a covering risk of loss.

Of course if you are a whinging innumerate that has no understanding of the concept of insurance and illiterately believes that paying for coverage against a loss too large to cover oneself.

The number of people in the world who have actually seen their insurance gamble pay off are overwhelmingly outnumbered by the number of people who have pissed away hundreds of thousands of dollars into the pockets of insurance executives and have nothing to show for it.

This is simply idiocy. An ad hoc assertion based on a priori belief. One would not see, as in actual real world data, a strong correlation between increased wealth in a society and access to insurance if in fact insurance was a "gamble."

Of course the above appears predicated on the ignorant and analytical wrong assumption that the policy holder is gambling for a payoff (which is not what insurance is about) rather than paying out for a coverage against financially inconvenient or crushing loss; stemming from an evident inability to properly assess risk and cost, and thus relying on mere ad hoc assumptions based on airy dataless assumptions, as the following:

How much money would you have right now if every penny you've put into insuring your house or your autos or your life had instead gone into an interest bearing account?

Amusing.... innumerate question of course (particulalry in a world of deposit bank accounts bearing less than 1% interest.

Enough to buy a house, 2 cars, leave your kids a healthy inheritance, and still buy you a nice retirement, I'll wager. So yeah, if it were up to me, I absolutely would run without insurance. Without question, in a heartbeat.

It is beautiful to see such innumerate, ad hoc blundering as supposed thinking about risk.

I could see an argument for insurance if it was a coop. Once you add the need for corporate overhead and profit margins and stock dividends, it turns into a giant scam.[/QUOTE]

Originally Posted by KidVermicious

Shut up, Dingleberry. I can't even see your post, yet somehow I know it's just filled to capacity with overwrought descriptions of my provincialism and ignorance, and yet somehow completely empty of anything resembling substance or common sense.

Your schtick is old. Go troll somewhere else.

Still the dimwitted little butt hurt whiner, eh?

Substance and common sense, well, given what we can see from your inability to reason, I am happy to be seen as devoid of that by you.

Originally Posted by KidVermicious

Cars would be cheaper because they would have to be. Without running credit tabs, people wouldn't be willing to buy disposable vehicles at 40k a pop.

Cars would be cheaper because they have to be.... Only obese Americans stuffed to the brim with myopic provincial self-satisfied ignorance can write such tripe.

Of course this is very simply a gross logical fallacy (I suppose since he wrote it, it is virtually redundant to write that): in fact automobiles would not 'have to be cheaper' - and indeed without large scale consumption' providing economies of scale there is no reason they would be. Rather, as actual current real world markets show, the actual result runs more to consumers simply not being able to afford the products, which would generally without scale production be more expensive, and using alternative means of transport. Such as walking.

Now giving American obesity, this might not be so bad, except of course the endless whinging on they'd engage in.

And yet, the insurance companies still make a profit, why is that?

Actuarial tables. Statistical analysis of Expected Loss and a motive to stay in business.

Now why this is problematic rather escapes or how it "refutes" Wolf's point as a response, except of course. Businesses providing insurance are not doing a very good job if they do go out of business in coverage of risk.

Pointing out individuals who happen to have used their insurance coverage doesn't prove that having that coverage in the first place is a good idea. It just means they got lucky and the money they paid for that coverage isn't entirely wasted.

Amusing: this is a perfect illustration of the idiots fallacious thinking.

Pointing out what happens in the case of such payout (and when people don't have such insurance) perfectly shows why insurance is a good idea.

Notwithstanding the innumerate idea that coverage is wasted if there is not a payout.

[Lounsbury]

Originally Posted by JackieLikesVariety

even better - a national bank run through the post office

repair the infrastructure, help those who currently don't bank (the "unbanked", hate that phrase)

there is NO downside to this

it is already working in other countries!

Postal banking systems are also ubiquitous in other countries, where their long record of safe and profitable public banking has proved the viability of the model. The mother of all postal banks was in Great Britain in the 19 th century. The leader today is Japan Post Bank (JPB), now the largest depository bank in the world. Not only is it a convenient place for Japanese citizens to save their money, but the government has succeeded in drawing on JPB’s massive deposit base to fund a major portion of the federal budget. Rather than using its deposits to back commercial loans as most banks do, Japan Post invests them in government securities. That means the government is borrowing from its own bank and its own people rather than from foreign bondholders.

Amusing.

Well, when one looks at what return Japan Post Bank gets its depositors, what it does (funding Japan's ultimately unsustainablely escalating debt burden ( 211.70 percent of Gross Domestic Product in 2011)), an informed person would not particularly cite this as either a model or a good thing - let alone "no downside."

The idea that exploiting captive depositors to fund current government debt (particularly when one is in the eye watering range over 200% of GDP and facing decades of essential GDP flat-lining, little to no growth) is something awesome is an act of grotesque dishonesty or even more grotesque ignorance. There is no story where said depositors do not lose in the end. They will either see their deposits defaulted on or inflated away. This is simply finacial repression, exploiting the population. And the idiot who cheers this simply is cheering the fleecing of a population.

Of course foreign bondholders is irrelevant to the equation. One can issue bonds (as Japan does) and also have them restricted to residents and nationals. Perfectly possible and doable under domestic law if one so desires.

But this is more or less what I expect from ill-informed ignoramuses.

[Lounsbury]

Originally Posted by Wolf Larsen

Insurance companies generally make their money investing the float. (I own stock in two, United Healthcare and Prudential.) Most insurance companies pay out about as much as they take in in premiums. Where they make their money is that you pay up front and they get to invest it and keep the investment profits as they pay it out later. Insurance companies are good but not great investments. UNH has a return on equity of 17% and Prudential has a current ROE of -5%. (They had a bad year.) Apple's ROE is 32%. Guess which one is gouging the consumer.

Ah but Wolf, it's financial so BAD!!! Do not confuse the ranters with actual data, they know already they're being exploited and of course self-insuring is better... Just because!

However, re operations, to be more specific: insurance operators collect massive amounts of actuarial data to have an objective basis to estimate how much is likely to be paid out in any given time period, versus incoming premiums, and how actual duration of policies. The difference then can be invested to cover both profit (however thin as you demonstrate) and expected payouts in the future.

the story of modern insurance is really quite fascinating: Scottish Widows, I had a profile of how this started (much better than their anodyne profile), the long, slow collection of data on life expectancies of Scottish widows and their clergy husband, statistical analysis of the same, and eventual the life insurance product that resulted and created modern life insurance.

Obviously mere exploitation, couldn't have been a real social problem....

[Wolf Larsen]

I highly recommend the book "Against The Gods: The Remarkable Story Of Risk" by Peter L. Bernstein. It give the historical development of the understanding of risk and how the modern insurance industry arose out of that. It is a tour de force and should be required reading in college.

[Tuckerfan]

Originally Posted by ryevermouthbitters

Well you know, you get compared to rapists and called pro-starvation by a bunch of clueless idiots enough times and you start to wonder if remaining reserved has any benefits.

I have to admit that its an unfair comparison. Rapists usually serve longer prison terms.

Originally Posted by THespos

This is my biggest issue with Big Data. There's this assumption of predictive value that comes along with these ideas of using social and behavioral data points to find most desirable/least desirable customers.

Vetting shit like this is part of my job. Ninety-nine times out of a hundred, these Big Data companies haven't validated their supposed predictive abilities with any hardcore evidence. Makes for some interesting meetings once you mention this, especially after having asked some fun questions about data-gathering techniques and their compatibility with established privacy policies (and the prevailing attitude toward snooping...)

I have yet to see things like Facebook, Google, or any of the Big Data powered recommendation engines have better than 10% accuracy when it comes to suggesting things to me. Their big failure, I think, comes from the fact that they only ask you if you "like" something. That can put you in the ballpark, but just because you happen to like cars, for example, doesn't mean that you're interested in the latest Ford Slug, or Smart Coffinmobile.

Originally Posted by Wolf Larsen

I don't believe cars would be much cheaper. Car manufacturers do not make much per car. (I went through the Toyota annual report with a fine tooth comb back when I owned the stock.) It's only a few hundred per car. You could make some ugly but durable cars that were somewhat cheaper, but I doubt they'd sell. Removing insurance on the vehicle itself (not your potential liability to others) would drop the price less than a set of tires.

I give you the Tata Nano. The cheapest car in the world (less than $3K). Built by low-wage slaves in India, with a reputation for bursting into flames. I can think of a few things they could do that would potentially lower the cost (Studebaker had a concept car where the hood and trunklid were interchangeable, and the front and rear doors could be cross-swapped, so instead of having 6 different parts, you had only 2. A big savings on inventory costs and tooling.), but nothing that could be built as cheap using labor paid a decent wage.

[Wolf Larsen]

The cheapness of the Tata Nano has nothing to do with insurance or lack there of, it was intended as the car from which no further parts could be removed.

[Tuckerfan]

Originally Posted by Wolf Larsen

The cheapness of the Tata Nano has nothing to do with insurance or lack there of, it was intended as the car from which no further parts could be removed.

Exactly. It proves that you get a cheap car by stripping it down to almost nothing and not paying your workers much money. Though, I suppose you could argue, that by not having a large insurance industry which dictates the use of safety features, you can get away with building a dirt cheap deathtrap on wheels.

[Jaglavak]

Ah, vintage Lounsie. Although an acquired taste, I do miss it sometimes.

Originally Posted by Lounsbury

Outlaw what? Looking at publicly available data that is published in public and drawing conclusions? I am sure that this could not in any way be an irrationally stupid and impossible to implement idea.

Yes exactly, outlaw lending decisions based on information from online social networks. Enforcement would be simple by forcing banksters to state their lending criteria in writing, and their reasons for approving or rejecting each loan application in writing. This is a revolutionary concept for you? You have operated in the opaque economies for too long.

Originally Posted by Lounsbury

Or put more accurately "I normally despise [any financial activity] because I resent money."

No no my dear Lounsie. I don't resent money, I fucking hate it. So would you, if you put a hundredth as much effort into thinking about it as you spend chasing it.

Originally Posted by Lounsbury

State banks are the route to poverty and broken economic systems.

Sorry Smartie, I must agree with Lounsie on this point. Bureacrats and politicians simply cannot be trusted with this kind of power. Especially since those same politicians can greatly influence the money supply, and are in charge of issuing government bonds. That kind of temptation would try the principles of a saint. No, the only way is to keep the banksters on a short choker chain and under a bright spotlight. Roaches run from the light.

Originally Posted by Lounsbury

If you are publishing your social life, then it is not digging. Period. And if you want someone else's money to fund yourself, well then yes, you have to play by the persons lending requirements.

If the banksters want to play in my economy, well then yes, they will have to play by the legal requirements that we the people enact. I should think this is simple enough so even you can understand.

Originally Posted by Lounsbury

The use of social data is as old as lending itself. Unvetted, the average person is a terrible credit risk (as the failure of first iterations of "Peer to Peer" lending showed - people are lying thieves in general and happy to run away with other peoples money if there are limited consequences).

I am in no way suggesting that borrowers should not be vetted. Nor am I suggesting that there should be no consequences for not repaying loans. But the key point, you old fossil, is that now is different. Now we have nearly a billion people who are using Facebook as a significant part of their social lives. Party pictures, kid pictures, random ill considered rants, tasteless jokes, etc etc. Things that in the past might have gone by at a back yard BBQ and be gone forever. Banks have gotten by just fine til now without delving into people's scrapbooks and party conversations. None of that stuff should have any bearing on a loan decision.

Originally Posted by Lounsbury

Freedom as a concept includes no automatic right to you getting other people's money.

Nor have I suggested any such thing. Your knee-jerk emotional reaction seems to be clouding your reading comprehension. Perhaps heavy drinking might help you.

Originally Posted by Lounsbury

In the real world, for loans of importance, such references were double checked, and asked to provide themselves additional references that were not coming from you directly. In many ways, not only do you have not a clue as to the degree to which a lender may have "invaded" the privacy of the potential borrower.

Most amusing. I am quite familiar with borrower vetting practices, thank you. Nothing about it does or should involve snooping on casual conversations between friends.

Originally Posted by Lounsbury

Your idealised vision is at once factually weak and rather ignores that (i) reference checking effectively is pre-internet social media tracking (ii) that such checking has always existed and indeed in the past likely had greater discrimination to non-established borrowers - thus being a barrier to access to finance for the non-elite as a general matter.

(i) Ibid
(ii) Yes of course. But now (which, once again my dear dinosaur, is different) it is practically impossible to live a normal life without access to credit. I have my opinions about that, but there it is. So now (which is not then, do try to keep up you ossified curmudgeon) it is incumbent upon us to keep lending practices fair, relevant, and transparent. None of which involve Faceplant.

Take your time, we'll wait.

[Jaglavak]

Originally Posted by ryevermouthbitters

Well you know, you get compared to rapists and called pro-starvation by a bunch of clueless idiots enough times and you start to wonder if remaining reserved has any benefits.

Don't bother on my account. I didn't start out thinking you were scum. But your statements in the Twinkie thread made it painfully clear that you think nothing of squeezing and abusing the people who's hard work made you wealthy. And you seem to think you deserve it or something. Sad, really. FWIW you made a decent even-handed mod.

[Jaglavak]

Originally Posted by KidVermicious

Banks and insurance companies are powerful because we've made them that way. If we'd stop asking for credit and insurance when we don't need it, the problem of being taken advantage of by huge heartless corporations would get a lot smaller really really fast.

Insurance is a scam, and big-money lending is a scam. They're based on unscrupulous hacks using your money to make money. Neither is a good idea for the private consumer except in extreme circumstances, and their widespread use has completely distorted our entire economy to the point that we think we need them just to survive. It ain't true.

QFmofuckinT. There are only three good reasons to borrow. To get a better interest rate on existing debt, to buy something that is going to make money, or to buy the home you live in. For some a possible fourth reason might be to buy a car, but in reality most folks buy way more car than they should. Anything beyond that is a path to the poor house.

House insurance is a good idea for most folks. The rest of it is mostly a scam. The insurance companies have sold us the fairy tale that there is such a thing as a safe life, and then sold us the lie that they offer any such thing. Their goal is to take your money and give you nothing in return.

[mswas]

Originally Posted by Tuckerfan

I have yet to see things like Facebook, Google, or any of the Big Data powered recommendation engines have better than 10% accuracy when it comes to suggesting things to me. Their big failure, I think, comes from the fact that they only ask you if you "like" something. That can put you in the ballpark, but just because you happen to like cars, for example, doesn't mean that you're interested in the latest Ford Slug, or Smart Coffinmobile.

It's because the technology is still primitive. Ten years from now it will be several orders of magnitude more sophisticated.

[Farad'n]

Originally Posted by Tuckerfan

I give you the Tata Nano. The cheapest car in the world (less than $3K). Built by low-wage slaves in India, with a reputation for bursting into flames. I can think of a few things they could do that would potentially lower the cost (Studebaker had a concept car where the hood and trunklid were interchangeable, and the front and rear doors could be cross-swapped, so instead of having 6 different parts, you had only 2. A big savings on inventory costs and tooling.), but nothing that could be built as cheap using labor paid a decent wage.

I'll have you know the Nano is a delightful little car and a good product at this point. It's actually rather nicer than other Indian entry-level compacts that cost a couple $K more.

[Brian]

Originally Posted by Jaglavak

House insurance is a good idea for most folks. The rest of it is mostly a scam. The insurance companies have sold us the fairy tale that there is such a thing as a safe life, and then sold us the lie that they offer any such thing. Their goal is to take your money and give you nothing in return.

Other than house insurance, which kinds of insurance are a "scam"?

[Chacoguy]

Originally Posted by Brian

Other than house insurance, which kinds of insurance are a "scam"?

All of them; it's a classic case of one side having more access to information than the other. The island of Manhattan was sold for trinkets. The insurance industry has actuaries, computer analysts and such that the general public does not. It's a lopsided deal. Hell, why would the insurance industry exist at all if they couldn't turn a profit? They are preying on consumers lack of knowledge as far as what risks are involved, be it owning a car, getting sick, or dieing altogether.

[Jaglavak]

Chaco, you must enjoy aggravation.

The real scam with insurance is that they will find any sleazebag excuse to get out of paying off, and their lawyers can beat up your lawyers. One case that I recall was about ten years back, a woman driving through Tacoma was hit by a stolen SUV as the car theives were running from the police. Her insurance company (Farmer's Insurance) refused to pay off even though she was carrying full boat coverage. Their excuse was that the bad guys apparently hit her on purpose to knock her out of the way, so therefore it wasn't an accident, and she was only covered for accidents. The lady had paid faithfully for decades, now she was in the hospital in a body cast, and the dirtbags went slithering for the exit. The only thing that saved her was the shitstorm of negative coverage in the news. I know all the other insurance companies are just as dirty, but that scratched Farmer's off my list forever.

But the classic scam involved so-called health insurance. For decades private health insurance contracts had a clause that prohibited coverage for pre-existing conditions. The contracts were always written for a one year duration. The annual renewal was presented as a formality. Until you got sick. They would pay your medical bills for the remainder of the contract, and then refuse to renew at the end of the year. If you were in the hospital with cancer and needed one more round of chemo to survive, tough shit. It happened that way to my grandfather, and again about 20 years ago to the mother of a guy I worked with. They both died.

Actually, scam is too nice of a word for what these people do.

[Tuckerfan]

Don't forget the lifetime cap on benefits that health insurance has for 99% of the people, so if you get a serious illness, you can burn up all your coverage and then be stuck with huge bills.

[Wolf Larsen]

If health insurance is such a worthless scam, then I would expect the insightful wealthy to avoid it as they would have the information to know it was a scam and the resources to not need it. I've never heard of any of them actually doing so. And my wealthy friends tend to insure things quite consistently. What is that so? They certainly have access to the necessary information.

[Brian]

If health insurance is such a scam, why are we being required to buy it effective October 1 or pay a fine tax?

[Lounsbury]

Originally Posted by Tuckerfan

Don't forget the lifetime cap on benefits that health insurance has for 99% of the people, so if you get a serious illness, you can burn up all your coverage and then be stuck with huge bills.

Although this is particularly an American issue above all (given in particular American health care costs and problematic structures), there is nothing 'scam' in this. Without limit a single person (or small group of particularly sick persons) could bankrupt the resources of an insurance fund and thus leave the remainder of the insured parties with nothing to cover them. A result evidently unfair to them.

Thus even mutually owned, non-profit insurance schemes put in place.

But of course easy, emotionally immature and unreasoned outrage is rather more fun than the realisation that humanity has not yet reached the state of unlimited resources, what with resources being limited.

Taken in isolation these things always can be trumped up to look like Horrible Evil Things. However, in the real world of limited resources, limits have to be set to prevent one suck on resources from doing injustice to other parties.

Of course like Small Children, the wooley headed whinging irrational side of the Left is unable to conceive of impacts beyond the easy to grasp emotive anecdote.

For catastrophic coverage - health care or otherwise as in housing coverage for large scale natural disaster - there is a fine (but not unlimited) case for state backed coverage or state provided coverage. Private insurance can cover some degree of risk. It can not be a cover against all losses. Where the market can not cover, state coverage may be a net positive if it steps in.

Health care in some forms is such an area.

Originally Posted by Jaglavak

Ah, vintage Lounsie. Although an acquired taste, I do miss it sometimes.

Yes exactly, outlaw lending decisions based on information from online social networks.

Brilliant, could not possibly think that defining in a legally enforceable fashion (or even a practically enforceable fashion) what "online social networks" are and mean, particularly in a fashion that would be meaningful beyond the point-in-time that the law was passed, would be problematic at all...

Fraud case published on online newspaper: inaccessible!

Enforcement would be simple by forcing banksters to state their lending criteria in writing, and their reasons for approving or rejecting each loan application in writing.

You have the analytical capacity of a small child.

Statement of lending criteria really says fuck all about use or not of online sources. It is trivially easy to imagine legal wording that would render this moot.

A requirement to disclose sources of information used in the reaching of a credit decision, well I already indicated I thought this is a good idea. Of course to render effective you need a proper unified Financial Services supervision.

Unfortunately, USA remains mired in a late 19th century / early 20th century financial regulation system with narrowly defined specialist regulators (which no longer make sense) at both your Federal level and worse yet, regulation and supervision that happens purely at the State level. This was in fact a major source of your banking problems, with retail / consumer focused lenders sleazing their way to using local / State supervised (or worse yet unsupervised) credit originators / brokers.

The massive loophole where consumer impacting operational actors in the credit process can escape supervision is a crime (and the fault of your balkanised and outdated system). Of course this requires Federalisation of such oversight and doing away the anachronism of State based financial sector supervision. Regrettably the fever swamp of Left and Right cretins will likely oppose this to the death.

This is a revolutionary concept for you? You have operated in the opaque economies for too long.

No, rather I have a vastly better understanding than you of operations in these areas, including vastly better relative to transparent economies.

Your idea of banning using on-line social network data is profoundly stupid and unworkable.

You did accidental stumble on the workable idea that I already suggested: complete (and by regulation, I would say 'plain language') disclosure of the specific sources of information used to arrive at a credit decision, public and private.

However, the loophole

No no my dear Lounsie. I don't resent money, I fucking hate it. So would you, if you put a hundredth as much effort into thinking about it as you spend chasing it.

Spare me.

I know what lack of good systems, what bad money and what poverty does to people better than 99% of you drooling self-satisfied obese resource pigs.

Your position is that of the spoiled resentful child.

I am in no way suggesting that borrowers should not be vetted. Nor am I suggesting that there should be no consequences for not repaying loans. But the key point, you old fossil, is that now is different. Now we have nearly a billion people who are using Facebook as a significant part of their social lives. Party pictures, kid pictures, random ill considered rants, tasteless jokes, etc etc. Things that in the past might have gone by at a back yard BBQ and be gone forever. Banks have gotten by just fine til now without delving into people's scrapbooks and party conversations. None of that stuff should have any bearing on a loan decision.

Fossil? amusing.

People have published in newsletters, in other venue parties, photos, social events.

There is nothing extraordinarily new.

The only persons missing a point are those who think that there is some easy clear way to draw a red line around social media usage. Even if one could draw a legal definition that at once was focused and would also remain valid for more than a brief snapshot of time, it is trivially easy for such to be circumvented by merely noting information and finding "non online" person to "vet" (or doubtless a dozen other workarounds were I to put my unpleasant side to thinking about it).

This is Don Quixote and the Windmill.


Nor have I suggested any such thing. Your knee-jerk emotional reaction seems to be clouding your reading comprehension. Perhaps heavy drinking might help you.




Most amusing. I am quite familiar with borrower vetting practices, thank you. Nothing about it does or should involve snooping on casual conversations between friends.

Originally Posted by Chacoguy

All of them; it's a classic case of one side having more access to information than the other. The island of Manhattan was sold for trinkets.

Brilliant asing one's response on a myth that is at once historically unsupported and also analytically bankrupt (the value of whatever X as seen by Europeans really doesn't say anything about the value of X as seen by the native population - why is the Euro view the right one?). Of course the example is not factual as such, so off to a great start there.

The insurance industry has actuaries, computer analysts and such that the general public does not.

Well, yes, that's rather the point. It really makes not one lick of sense for the public have personal actuaries, now does it?

Hell, why would the insurance industry exist at all if they couldn't turn a profit?

Ah here we are the real problem: They're turning a Profit, OMG Evil Evil Evil!!!!~!11!!

So it boils down to Profit Evil.

Well, the development of wealth and the betterment of humanity rather says otherwise, but no convincing the wooley headed Hard Left, no matter the accumulated data and evidence.

Originally Posted by Wolf Larsen

If health insurance is such a worthless scam, then I would expect the insightful wealthy to avoid it as they would have the information to know it was a scam and the resources to not need it. I've never heard of any of them actually doing so. And my wealthy friends tend to insure things quite consistently. What is that so? They certainly have access to the necessary information.

Precisely, observed real world data on behaviour of parties with a choice utterly contradicts the entire line of reasoning.

But to see that there is in fact no actual rational analysis to the anti insurance mumblings and rantings, one may mere take for example the drooling innumerate and economically cretinous mumblings of KidV, whose impoverished mental acuity leads him to assert that insurance on housing is a scam and he'd get a better deal by investing his premiums in a bloody bank account.

Taking national averages from USA to avoid getting bogged down in provincial variations, it would appear the average house cost is USD 152K. Insurance costing, to simplify we can simply adopt the following as a very gross estimate derived from Federal government estimates it is claimed:

...the average cost of an annual premium for homeowners insurance is between $300 and $1,000. For most homeowners, the annual costs for a homeowners insurance policy can be estimated by dividing the value of the home by 1,000, then multiplying the result by $3.50.

Various other sources give an estimate close to the value spit out, USD 532, yearly.

So our Kid would have the gullible and easily swayed by empty headed appeals to emotion and just-so assertions believe that one could self insure appropriate to replace a USD 152 thousand house, by saving USD 532 year and placing this in a bank account, where presently in USA the average yield on saving is 0.21%.

Let us leave aside the problems of inflation of housing costs or inflation. In ten years (ignoring that compounding .21% yield for simplicity) the amazing sum of slightly over USD 5 thousand is socked away.

Why self evidently insurance is a scam....

(What re Insurance I think one is really seeing is the analytically empty emotional bleatings of Americans angry about their health insurance. Well there it's somewhat understandable how overweight dim-witted ill-informed provincials with essentially no idea of how things work elsewhere would lash out blindly against insurance. Their system in health insurance is utterly terrible and needs a root-and-branch rationalisation.

I'll allow that the irrational positions of Brian's sort are the problem there - not that the sheer idiocy and complete and grotesque innumeracy of the wooley headed emotional wing of the Left in this thread has particularly given reason to confidence.

[Brian]

Originally Posted by Lounsbury

I'll allow that the irrational positions of Brian's sort are the problem there - not that the sheer idiocy and complete and grotesque innumeracy of the wooley headed emotional wing of the Left in this thread has particularly given reason to confidence.

What's irrational is people claiming that "all insurance is a scam" on the one hand, while requiring everyone to buy government subsidized healthcare insurance on the other.

If insurance is a scam, why are we requiring it and subsidizing it? The left, at least on this board, wants to have it both ways. That's not rational.

[Lounsbury]

Originally Posted by Brian

What's irrational is people claiming that "all insurance is a scam" on the one hand, while requiring everyone to buy government subsidized healthcare insurance on the other. If insurance is a scam, why are we requiring it and subsidizing it? The left, at least on this board, wants to have it both ways. That's not rational.

That is true, however the Right in USA - people of your flavour I deduce from some things you write - have an entirely irrational aversion to mixed private - government models in health insurance, which I daresay is preventing a best case result to solve your crazy health costs.

Of course I can see our wooley headed Left actually see "government health insurance" as "open ended Gov payments" and skate over the word insurance.

[Jaglavak]

Always refreshing, Lounsie. And for once that is not snark. More later, chores first.

[Jaglavak]

Originally Posted by Jaglavak

Don't bother on my account. I didn't start out thinking you were scum.

OK, that was a little harsh. Sorry, I was in a chainsaw-ey mood when I wrote that.

[Tuckerfan]

Originally Posted by Wolf Larsen

If health insurance is such a worthless scam, then I would expect the insightful wealthy to avoid it as they would have the information to know it was a scam and the resources to not need it. I've never heard of any of them actually doing so. And my wealthy friends tend to insure things quite consistently. What is that so? They certainly have access to the necessary information.

Executives tend to have access to better plans and services than do ordinary folks (You think Steve Ballmer has to talk to the same insurance call center drone as the low-level MS employees do? Nope.), and often times their employers will pick up the full cost of the coverage. They don't even have to worry about a co-pay. High value executives might also have coverage mandated by the company's insurer. This is to protect their investment in the company. I can remember news accounts in the '80s about executives complaining because the insurance company was prohibiting them from doing "risky" things, like flying in small planes (since they're more likely to crash than commercial planes).

Simply put, wealthy people don't have the same experiences with insurance companies that poor folks do, because the insurance companies are more concerned about keeping the wealthy person's business than the poor person's.

[mswas]

Originally Posted by Lounsbury

That is true, however the Right in USA - people of your flavour I deduce from some things you write - have an entirely irrational aversion to mixed private - government models in health insurance, which I daresay is preventing a best case result to solve your crazy health costs.

Of course I can see our wooley headed Left actually see "government health insurance" as "open ended Gov payments" and skate over the word insurance.

Hedging risk isn't a scam. Private health insurance in America? It's a scam.

[Lounsbury]

Originally Posted by Tuckerfan

Executives tend to have access to better plans and services than do ordinary folks (You think Steve Ballmer has to talk to the same insurance call center drone as the low-level MS employees do? Nope.), and often times their employers will pick up the full cost of the coverage. They don't even have to worry about a co-pay. High value executives might also have coverage mandated by the company's insurer. This is to protect their investment in the company. I can remember news accounts in the '80s about executives complaining because the insurance company was prohibiting them from doing "risky" things, like flying in small planes (since they're more likely to crash than commercial planes).

Simply put, wealthy people don't have the same experiences with insurance companies that poor folks do, because the insurance companies are more concerned about keeping the wealthy person's business than the poor person's.

I rather doubt there is anything behind this comment than bald assumptions and ideology based assertion (mixed in with misunderstood fact, such as corporate Key Man insurance cited, in fact to the benefit of the company). While certainly with more money one can buy more extensive coverage as the higher pricing means less to you on a per capita basis (although more extensive coverage generally escalates rapidly in price to match the escalation in risk exposure(*)), this says exactly nothing about the utility of insurance and risk mitigation.

Empty assertion really tells us nothing about the subject of the utility of insurance (other than highlighting the class envy in certain parts).

As point of fact, it is impossible to build a scale insurance business on "the 1%" to use the favoured phrase of the Left in the USA. Depending on the profile, in fact the insurance industry does need the non rich.

Regardless, the economic data show a fundamental correlation between insurance market development - that is mass insurance access, and improved economic growth. (one can simply search google scholar for the economic literature impact, insurance, economic growth, developing countries to see a selection of the literature).

Were insurance in fact a scam and a bad deal for people, it is rather unlikely this correlation would emerge again and again across geographies of different culture, economic structure and maturity. Rather than relying on simpleminded anecdote and bald assertion, data tells us reality.

Originally Posted by mswas

Hedging risk isn't a scam. Private health insurance in America? It's a scam.

Perhaps, although I rather find the idea that in fact private health insurance in America is a "scam" in the ordinary English meaning of the word, to be risible.

Perhaps what is really meant behind the empty headed Left maundering is that private insurance as a national policy solution for mass health insurance coverage is not an optimal choice.

That is probably true, although fundamentally a different proposition.

It is telling that most of the Left bleating here about insurance revolves around health insurance (excepting the laughably innumerate idiocy about self-insuring a house, evidently made by a poster incapable of even simple maths). US insurance industry would seem well served to pivot to supporting national basic care and retreating to upper income supplementary coverage, a less politically fraught and likely more profitable segment in the long run.

[mswas]

Originally Posted by Lounsbury

Perhaps, although I rather find the idea that in fact private health insurance in America is a "scam" in the ordinary English meaning of the word, to be risible.

So if I pay $ 300 a month for several years into an account that is supposed to take care of me if I get sick or injured and then the company turns down my claim for the service I have been paying into for years, what would you call it?

If not delivering the service promised as part of the purchase agreement isn't a scam, what is it?

Perhaps what is really meant behind the empty headed Left maundering is that private insurance as a national policy solution for mass health insurance coverage is not an optimal choice.

Paying for services and not having them delivered is indeed suboptimal. Especially if you die as a result.

That is probably true, although fundamentally a different proposition.

It is telling that most of the Left bleating here about insurance revolves around health insurance (excepting the laughably innumerate idiocy about self-insuring a house, evidently made by a poster incapable of even simple maths). US insurance industry would seem well served to pivot to supporting national basic care and retreating to upper income supplementary coverage, a less politically fraught and likely more profitable segment in the long run.

The employer mandate is an incredible bit of market friction that takes up a lot of resources from businesses that could be spent focusing on their core competency. We can start there. I agree with the bit about supplemental care with basic national coverage. That would be far better than the current system.

[mswas]

Originally Posted by Lounsbury

As point of fact, it is impossible to build a scale insurance business on "the 1%" to use the favoured phrase of the Left in the USA. Depending on the profile, in fact the insurance industry does need the non rich.

In aggregate, not as individuals.

The person who has decision making power over the $ 100m account certainly gets better service than the person who has no decision making power and only pays $ 300 into it.

Business class service is always different from consumer level service in America, always, it doesn't matter which industry. As a business stakeholder when I speak to people about such services I get a higher level of customer service because the business development people want to speak to me. They want the 4 employees we have to be insured, and they want the growth business as we add more employees.

I can only imagine what service a 9 figure account gets over a 4-5 figure account.

I am certain Steve Ballmer can speak to the CEO of his insurance provider. When I worked at America Online their insurance was provided by an insurance company that they setup for America Online. It wasn't through some larger provider. As such it was super cheap and incredibly good coverage on day one.

[Lounsbury]

Originally Posted by mswas

So if I pay $ 300 a month for several years into an account that is supposed to take care of me if I get sick or injured and then the company turns down my claim for the service I have been paying into for years, what would you call it?

I call it demand and fraud management.

The denial might or might not be justified in the specifics. In the general, the mere fact you paid in X per month in insurance does not mean one has automatic coverage in a private insurance scheme, given issues of fraud in particular.

That there can be insurance company abuses re denial of care is of course self-evident.

What the populist whingers from the Left omit is that there is also the serious problem of fraud and abuse from the subscribers, which undermines the capacity of the system to cover others.

In a world of limited resources that means there will always be trade offs and one will always be able to generate heart-string pulling anecdotes or horror stories, whatever the insurance scheme, public or private.

So, no denial of coverage is not a scam nor even an indictment of a given system as such.

Paying for services and not having them delivered is indeed suboptimal. Especially if you die as a result.

In an imperfect world of limited resources, no matter what system you have, you will be able to generate the above phrase.

So it is, in the end, meaningless appeal to emotion of absolutely no value in the argument.

The employer mandate is an incredible bit of market friction that takes up a lot of resources from businesses that could be spent focusing on their core competency.

As I have just shared the Martin Wolf analysis from the FT, you should be aware that I am in entire agreement that the USA health care structure is something that is not in any way sensible or market optimal.

I am not a Right Bolshevik ideologically opposed to government action at all.



[QUOTE]

Originally Posted by mswas

In aggregate, not as individuals.

Well, yes, that is rather the point, now isn't it.

And if in the aggregate the service is so entirely terrible as the anecdotes would have it, there would be a migration away. Mass market base satisfaction is key to any insurance business. Of course as in almost any service industry, that base quickly becomes an "acquired thing" that people take for granted and then bitch and moan about privileges on the margins.

The person who has decision making power over the $ 100m account certainly gets better service than the person who has no decision making power and only pays $ 300 into it.

Said person in the first also pays rather large sums. Et alors? One can't build bespoke servicing on a scale business. The economics never work out regardless of who pays.

That does not make insurance a scam. It makes it like any other private market product, something with some inherent limitations.

[Jaglavak]

Originally Posted by Jaglavak

For decades private health insurance contracts had a clause that prohibited coverage for pre-existing conditions. The contracts were always written for a one year duration. The annual renewal was presented as a formality. Until you got sick. They would pay your medical bills for the remainder of the contract, and then refuse to renew at the end of the year. If you were in the hospital with cancer and needed one more round of chemo to survive, tough shit.

Ahem. This is not a one-off horror story. This was a universal industry practice for at least half a century and damn right it was a scam. Of course it relied on stupid people not reading the fine print, that is a central feature of every scam. The people behind it are lowlife scumbag bottom feeding scammers posing as honest businessmen. The fact that this particular scam has been shut down doesn't change who they are.

[McNutty]

I think one thing that makes people angry about insurance is a fundamental misunderstanding about it: it's not a magical umbrella that you sign up for in order to make expensive things free. The idea isn't that you are paying a subscription to an "auto accidents don't cost me anything" service, it's that you are paying for your auto accidents over the long term by paying a little bit every so often. And you're paying more, on average, than your accidents actually cost, because you pay a premium for the luxury of having these large costs spread out over a long period of time -- someone else is acting as a big financial buffer for you, and they need some incentive to do that. Complaining that the insurance company is making a profit is like complaining that the supermarket paid less for your milk than you paid them for it.

If you get in an auto accident and your insurance company only gives you $8k for your car that costs $9k to replace, the general description of what happened isn't that they shorted you $1k, it's that you just had a nine thousand dollar hardship that, due to your foresight (or, more likely, obedience of a law that forces foresight on you), only cost you $1k in the moment, and now you aren't wondering where you're going to come up with rent for the next year. You may have even paid more than $8k into your insurance policy over the years, but then again, maybe you have paid a lot less, too.

Originally Posted by Lounsbury

And if in the aggregate the service is so entirely terrible as the anecdotes would have it, there would be a migration away. Mass market base satisfaction is key to any insurance business.

Yes, but: The situation with respect to health insurance in the US artificially dampens these market forces so significantly that I think they're effectively gone. I have had great insurance (Microsoft: zero copays are not just for Steve Ballmer [well, ok, i have heard this has slipped in recent years, but back then it was gold-plated]), and I have had what I consider shitty insurance (my current insurance company basically denies every claim once, hoping I won't spend the requisite hours on the phone yelling, and the co-pays are high, and the providers are limited), and never once have I been in a situation where I actually felt like I had a real choice as a consumer to "migrate away" from my insurance provider. The subsidized and group-negotiated rate you get through your employer is simply too good to walk away from, so I'd be spending thousands extra if I went somewhere else. The upshot is that I tolerate what is ultimately pretty shitty service, and I feel helpless. And the kicker is that I'm in this situation despite being a relatively wealthy person with a decent job and "good" health coverage. I feel terrible for anyone who doesn't have time in their workday to spend hours on the phone trying to get their insurance company to pay for stuff that is covered, or who can't afford an unexpected "oops, that's not covered" $1000 here and there, or who just gets their credit fucked by being sent to collections over a $4k bill that they aren't even supposed to be on the hook for.

[mswas]

Originally Posted by McNutty

Yes, but: The situation with respect to health insurance in the US artificially dampens these market forces so significantly that I think they're effectively gone. I have had great insurance (Microsoft: zero copays are not just for Steve Ballmer [well, ok, i have heard this has slipped in recent years, but back then it was gold-plated]), and I have had what I consider shitty insurance (my current insurance company basically denies every claim once, hoping I won't spend the requisite hours on the phone yelling, and the co-pays are high, and the providers are limited), and never once have I been in a situation where I actually felt like I had a real choice as a consumer to "migrate away" from my insurance provider. The subsidized and group-negotiated rate you get through your employer is simply too good to walk away from, so I'd be spending thousands extra if I went somewhere else. The upshot is that I tolerate what is ultimately pretty shitty service, and I feel helpless. And the kicker is that I'm in this situation despite being a relatively wealthy person with a decent job and "good" health coverage. I feel terrible for anyone who doesn't have time in their workday to spend hours on the phone trying to get their insurance company to pay for stuff that is covered, or who can't afford an unexpected "oops, that's not covered" $1000 here and there, or who just gets their credit fucked by being sent to collections over a $4k bill that they aren't even supposed to be on the hook for.

^^This