Archive for May, 2009

Hats off to Verizon Fios!

May 31, 2009 4 comments

Although Rocky is a sourpuss and curmudgeon, that doesn’t prevent him from offering an occasional well-deserved compliment. In this case, Verizon Fios deserves a round of applause.

Rocky placed his order about 10 days ago. On Sunday morning at 9am, the polite and knowledgable technician punctually arrived. He pulled the fiber, installed the new optical terminal , router, TV set top boxes, and transferred the voice service in six hours — all without a glitch. As the technician departed, two Verizon contractors (of questionable immigration status) manually buried the new fiber optic cable that had been run several hundred feet from the telephone pole to the house.

The Piece de Resistance was when the contractors re-seeded Rocky’s lawn and covered the fresh seed with dry salt hay to promote germination.

The experience reaffirms Rocky’s belief that large corporations can provide good quality service. It’s mainly a matter of capital, priorities and good management.

[Disclosure: Rocky just watched Iron Chef on Food Networks’ High Definition channel. The picture quality was truly remarkable, but he’s not sure that he wanted to get quite so up-close and personal with a raw steak’s connective tissue.]


Short people should pay less income tax

May 29, 2009 Comments off

Rocky just realized that Randy Newman’s 1977 hit “Short People…got no reason to live” is actually a politically-charged parable about income tax policy.

Harvard Economist Greg Mankiw’s paper “The Optimal Taxation of Height: A Case Study of Utilitarian Income Redistribution” [click here] argues that tall people earn more money, and so fairness dictates that they should pay more in taxes than short people. He uses a Utilitarian analysis of the sort favored by 19th century philosophers Jeremy Bentham and Francis Edgeworth. (Jeremy Bentham’s auto-icon declined Rocky’s repeated requests for comment.)

Given President Obama’s zeal to “spread the wealth around,” Rocky (whose height is below average) is looking for a new box to check on his 2010 Form 1040.

The Form 1040 has a box to check for the blind person credit. It has a box to check for the qualifying child credit. But it has no box to check for the short person credit.

Rocky plans to discuss this issue with Rep. Charlie Rangel (Chair of The House Ways & Means Committee and a representative from NY’s Washington Heights neighborhood.)

Investing 101 – An Introduction to FX Fraud

May 26, 2009 5 comments

The CFTC charged Robert Watson, a Finance Professor at Texas A&M University’s Mays Business School with orchestrating a multi-million dollar fraudulent off-exchange foreign currency scheme. The Complaint (click here) alleges that Watson generated fictitious account statements, lied about performance, and, not surprisingly, lost lots of money.

Intrigued by Professor Watson’s extracurricular activities, Rocky visited the Texas A&M Website, but discovered all mention of Professor Watson had been purged. (So much for the presumption of innocence … and the value of tenure.)
Professor Watson’s Google cache page remains.

Woody Allen (perhaps unfairly) said, “Those who can’t do, teach.” In this case, that may be especially troubling. It sure would be interesting to see Professor Watson’s final exam questions!

[Update: Texas A&M just posted the following on their website: “Watson was misidentified as an executive professor of finance at Texas A&M University‚Äôs Mays Business School. Watson resigned from his position effective April 30, 2009 citing family reasons.” This may explain his absence on the Texas A&M website, but the revelation is not reassuring as he was evidently an adjunct professor hired to teach based on “real-world” experience.]

If a tree falls in a forest, will Verizon hear it?

May 22, 2009 8 comments

Rocky has a short fuse dealing with incompetent Customer Service Representatives. Yesterday, he made a wager with Trophy Wife that he would not lose his temper while reporting a Verizon DSL outage.

Verizon network engineers only investigate network problems after many users complain. However, Verizon’s troubleshooting procedure now requires an hour-long phone call with a CSR. Obviously very few people will spend an hour to report a problem (and Verizon’s self-calculated network reliability perversely increases as a result)!

Rocky’s DSL went down (again) yesterday evening. He ran network diagnostics and discovered a 50-100% loss of packets. After making his wager with Trophy Wife, he called Verizon:

Rocky: “I’d like to report a DSL outage”
Verizon: “Noone in your area has reported an outage.”
Rocky: “I know. It just went down. If you look at the service history of this area code and exchange, you’ll note problems for the past sixty days. I am experiencing substantial packet loss based on ping tests.”

[After 45 minutes of having Rocky power-cycle his computer, check his modem settings and run completely irrelevant commands on his pc…]

Rocky: “Do you agree that Verizon has a network problem?”
Verizon: “No. Your modem is faulty. We will ship you a new one.”
Rocky: “I keep a spare. Let me plug it in.”

[After 20 more minutes of the same settings check.]

Rocky: “Do you now agree that my modem is fine, and you have a network problem?”
Verizon: “No. We are not having a network problem. Noone else is reporting a problem. You replaced your current modem with an old unsupported modem.”

Rocky: “$#*($%!(*&#%#(*$#$###$#!!!!!”

Trophy Wife won the bet.

[Disclosure: Cablevision once asked Trophy Wife (while reporting a problem) whether she knew how to turn on a television, and then not believing her affirmative response, asked to speak to her husband. Rocky and Trophy Wife are no longer Cablevision customers.]

No more Viagra: Pass the Pepto-Bismol

May 13, 2009 7 comments

peptobismolGM and Chrysler employees will no longer receive unlimited, free Viagra, as the UAW “tightens its belt.” [Click here.]

Rocky notes that Ford and Chrysler consider the volume of employee Viagra consumption to be a trade secret, but GM disclosed that it spends $17 million per year on Viagra, which averages out to $150 for every one of their male employees. The HMO bulk price for Viagra is around $.50 per dose, which means that the “average” male GM employee pops the little blue pill an impressive 300 times each year!

Rocky ponders, do sleepy and exhausted workers help explain GM’s quality control problems?

Rocky understands the need to control health care costs, but he was dismayed to learn that the UAW agreed to cancel Nexium coverage too.

Nexium is the “purple pill” that offers 24-hour heartburn relief. There’s no shortage of heartburn amongst GM employees!

[CORRECTION/UPDATE: Rocky’s math assumed that 50% GM employees are male. Trophy Wife points out that, in reality, only 20% of GM employees are female [click here], which means that the “average” GM employee consumes Viagra “only” 189 times each year. Rocky thanks Trophy Wife for this correction.]

A bonfire of two-by-fours

Goodbye: Gasoline. Hello: Lumber.

Rocky today bid adieu to the last of his position in the June gasoline crack spread. He entered the spread in January (click here) when gasoline prices were below the marginal cost of production (“a free lunch”). Since refineries are ineligible to receive TARP funds, they needed to produce less, raise prices, or go bankrupt. All three things happened, and his position returned an improbably successful unleveraged 765%.

(As a humble speculator, Rocky admits that he didn’t buy the exact low, or sell the exact high — and he admits that anyone who bought the exact low in Bank of America did nearly as well!)

Rocky now sees a similar situation unfolding in Lumber. Lumber currently trades at its lowest price in 25 years — below its marginal cost of production. The US and Canada are locked in a bitter tariff dispute, and Weyerhaeuser, among others, are closing mills and curtailing production. This interview with the CEO of the world’s largest lumber company summarizes Rocky’s view. (Rocky hopes this CEO’s clairvoyance is better than Ken Lewis’ at Bank of America.)

Rocky is confident that lumber prices will eventually rise…and perhaps double or triple from the lows. But he’s less confident about his timing and entry point because the recently shuttered lumber mills are dumping their excess inventory into the wholesale channel. Once this inventory clears (30 days or 300 days?), he expects prices to gap importantly higher — and because lumber has a tendency to gap violently, there probably won’t be a graceful entry point.

[Disclosure: Rocky NEVER gives investment advice, and he is frequently wrong on the price direction, the timing, or both. If Rocky is wrong on lumber, and oil prices continue to rise, he’ll replace the oil furnace in his home with a wood stove — and will heat his house next winter by burning two-by-fours.]

Here’s a 25 year picture of lumber prices:

Lumber prices since 1986

Lumber prices since 1986

Trophy Wife, two men, and a truck

mover1Trophy Wife started working out with a personal trainer more than a year ago. The hard work paid off: She can run much faster than Rocky. And she can bench press more weight than Rocky.

Her tight abs and bulging biceps have attracted “attention.” The health benefits of regular exercise are well documented, but here’s an example of exercise leading to a different kind of attention. A new career in moving and storage!

Trophy Wife just received this unsolicited email:

From: Two Men and a Truck []
Sent: Wednesday, May 06, 2009 9:47 AM
To: [Name deleted for Trophy Wife’s Privacy]
Subject: TWO MEN AND A TRUCK? meeting request.

I am pleased to introduce you to an exciting opportunity with the TWO MEN AND A TRUCKR franchise system. I want to discuss how you can join our company as a franchisee because of your background and experience. Let’s set a time when we can talk about the system’s benefits.

TWO MEN AND A TRUCKR is the first and largest moving franchise in the United States. Our company has grown to more than 200 locations worldwide. We offer home and business moving services, as well as boxes and packing supplies. Our franchisees work on growing their business, not on the trucks. Prior moving experience is not required.

Let us show you why our company ranked “Highest in Customer Satisfaction with Full-Service Moving Companies” in the J.D. Power and Associates 2008 Full-Service Moving Company Satisfaction Studysm. For more information, visit

Call me or reply to this e-mail today to discuss becoming a TWO MEN AND A TRUCKR strategic partner! Click here to learn more about franchise opportunities.


Pamela Batten
Franchise Sales Coordinator
3400 Belle Chase Way
Lansing, MI 48911
(800) 345-1070, ext. 4036