Recent Diary Entries

Tuesday 24 January - RIM's not dead yet!

Research In Motion has been in the news a lot in the last year or two, and almost always for a bad reason. Their executives get drunk and cause planes to have to make emergency landings. Their tablet was released a year before its software was ready. Their long-overdue replacement of the aging, creaky software on their phones is not only long overdue but keeps getting pushed farther and farther into the future. Their network has outages that turn their devices into not much more than non-smart phones with a calculator app. Apple and Android are increasing their sales while RIM's sales fall. They finally replace the bizarre two-headed co-leadership structure with something more closely resembling what almost every other major company uses, and the first thing the new guy says essentially translates as "We're on the right path and we just need to convince people of that, so we'll keep doing what we've been doing." And through it all, the stock price plummets.

Obviously, a lot has gone wrong. RIM, formerly known for innovative technology, is now innovative primarily in the area of new ways to shoot one's own foot. They have a lot of work to do.

And I understand that the nature of the press is that they jump all over anything that comes their way, so any time RIM blunders, out come all the "Is this the end?" stories.

But really, let's take a step back and think about it. Do you know anyone who used to use a BlackBerry and still does? I do. I'm one, and I know lots of others. Do you know anyone who used to use something else and now uses a BlackBerry? I do; for example, I know of one of my friends who switched to BlackBerry from another smartphone just in the last couple of weeks. Yes, Apple and Android are posting better sales numbers, but from the press reports you'd think only a handful of loyal customers are still buying BlackBerries and nobody's switched to BlackBerry from something else in years, and that's simply not true.

As for the falling sales, the news isn't bad everywhere. Yes, it's bad in the U.S., and that's very bad news. But the latest figures I've seen suggest the number of BlackBerries in Canada is actually increasing still, though not at the pace it used to. BlackBerries outsell iPhones by a large margin in India, which as I'm sure you've heard is a very large market (and a market where smartphones have historically been rare but are now making big market strides). I've seen a figure that RIM's market share in Indonesia is close to 50% (to be fair, I haven't seen a source cited for that, so I'd take the number with a grain of salt, though I think it's reasonable to believe that it indicates RIM is doing well in this country with a population of nearly a quarter of a billion). You don't hear the good stories very often, do you?

And here's something else to keep in mind: RIM makes money not only from sales of new devices, like every other cell phone maker, but also from its existing customers every month. Even in the U.S., where BlackBerries now only make up about 10% of sales (well behind Android and Apple), they're still something like 20% of the devices in use, and RIM makes money off every one of those 20% of phones. Remember that BlackBerries require RIM's infrastructure (which is why they're so severely impacted when RIM has an outage), and so some portion of what a BlackBerry user pays their carrier every month goes back to RIM. I haven't bought a new BlackBerry since 2009 (though I plan to in the near future) and yet RIM still makes money off me every month. Obviously, if they don't get their sales numbers up, their market share will continue to fall, but something on the order of a quarter of RIM's revenue comes from this, which can help keep them going while they work on their problems.

One other note: last I heard, RIM is debt-free and has $1.5 billion in the bank. That won't last forever, of course, but that too is a cushion to keep the company going while they work on their problems. I have no idea of their cash burn rate, but they're not going bankrupt in the near future.

So yes, RIM has a big problem. They needed to fix it last year, and didn't, and so now they not only need to fix it but need to fix it in a way that blows everyone away. But just because all you read about is doom and gloom doesn't mean that it's the whole story.

Wednesday 28 December - Regulate the Wireless Industry

In the next year or two, the airline industry is being forced by the government to start being honest in their advertised prices. There'll be no more of the current situation in which you see a fare advertised for $49 but by the time you add on all the fees, surcharges, levies, and other miscellaneous fine print, the seat ends up costing a few hundred bucks.

Well, much as I generally think that the marketplace should be left to sort this stuff out via competition, I have to conclude that it's time to do the same thing to the wireless phone industry, because clearly competition isn't doing it.

Everyone already knows that most cell phone providers tack on a bogus "system access fee" on top of their advertised prices. And there's the 911 fee, and sometimes other little things as well, so it turns out that even before taxes, you're probably paying close to $10/month more than the advertised price. This really ought to be stopped; any mandatory charges should be part of the price of the package.

They're also doing similar tricks with the prices of the phones themselves. I've been looking at upgrading my current phone to a new one that's listed at $169.99 (on a three-year term). It's actually been on sale at some stores for as little as -$100 (yes, negative: the phone is free and includes a $100 gift card), but none of those sales are available to existing customers, only random new people who walk in off the street.

It's bad enough that they love new customers more than they love existing customers, but it doesn't end there. Not by a long shot. I can't upgrade my phone to this model for $169.99. The price is actually $219.99, with a $50 mail-in rebate. So I have to wait a couple of months to get that $50 back, and while I have to pay tax on the full $219.99, the rebate doesn't undo the tax on that $50.

But wait! There's more! Since the last time I upgraded, Rogers has added a $35 "administration fee" on upgrades.

So here's how it adds up, including taxes (but not including the cost of mailing in the rebate application):

• New customer: -$100
• Advertised price: $192.09
• Actual upgrade price: $238.14

The actual price is nearly 25% higher than the advertised price.

Tuesday 20 December - The Annual Charity List

Late each year, I sort through all the begging letters I've received from charities to figure out which ones I'm going to support, and how much each will get. I did that this evening, and as usual, some charities do a much better job of wasting money on repetitive mailings than others.

This year's total is 98 pieces from 31 charities. That's just a few more pieces than last year, from two fewer charities.

I'll start with a list of charities which did the right thing: they sent me one letter. I'm not saying which ones I'm donating to, or endorsing what they do with the donations they receive, but they do deserve credit for not wasting money, trees, and emissions on excessive mailings. The ones in bold also made this list last year.

• AIDS Committee of Toronto
• Canadian Diabetes Association
• CARE
• Daily Bread Food Bank
• Epilepsy Canada
• Mouth and Foot Painters Association
• Scott Mission
• Second Harvest
• YWCA

And now, the Hall of Shame: the charities who sent the most junk mail. This year, using my usual criterion of an average of at least one letter every two months, there are six, as opposed to only two last year:

• CNIB: 9
• Ecojustice: 9 (up from 7 last year)
• Prostate Cancer: 9 (up from 8 last year)
• Canadian Wildlife Federation: 7
• United Way: 7
• Red Cross: 6

I'm particularly disappointed in Ecojustice and CWF for being environmental charities who don't care about waste, and in the United Way, who in most previous years have honoured my request for them to send only one letter a year but have now thrown that out the window. A dishonourable mention goes to the Arthritis Society, who just today phoned me and pressured me to donate immediately over the phone, saying that they knew I only wanted one letter a year; despite knowing that, they sent me two letters this year.

Friday 25 November - Price match guarantee

Best Buy (and Future Shop, since they're essentially two sides of the same coin) has a price match guarantee. The quick version, if you don't read the fine print, is that if you find a lower price elsewhere, they'll not only match it, but give you an extra 10% of the difference (so, for instance, if their price is $500 and someone else's is $400, they'll sell you the item for $390).

But if you read the fine print, they have a huge pile of exclusions that they can use to refuse to honour their guarantee. First, the obvious ones:

Our Lowest Price Guarantee does not apply to advertising errors or misprints, special educational prices, restricted offers, mail order offers, rebates, coupons, premiums, free or bonus offers, OEM products, limited or minimum quantity or limited time offers, close-outs, liquidations, clearances, and special financing offers.

So just on the "limited time offers" condition, they could refuse to match a sale price anywhere else, because how often do things go on sale without a specified end date (i.e. a limitation on the time during which the item is on sale at that price)? Exactly. And limited quantity? How often do you see a flyer that sets a limit on how many of the item you can buy, either as a specific number or with some sort of fine print along the lines of "We reserve the right to limit quantities to normal household requirements"?

And then there's this gem:

Products advertised on the web will be calculated to include all charges applicable for next-day delivery to your home address.

So if a bricks-and-mortar store's online flyer advertises something, and you don't have a dead-trees edition of the flyer, Best Buy can refuse to honour the actual price of the item in the bricks-and-mortar store, only honouring the price with a bogus shipping charge (which, in many cases, means that by the time they honour that price plus 10% of the difference, you'll still be paying more than you would if you bought it from the other store).

I managed to get them to match/beat a competitor's price on the item I bought today, even though they could have rejected it on at least two grounds or added a shipping charge which would have brought their "price match" price higher than their competitor's price. But while the salesperson was processing my order, the salesperson right next to him was rejecting someone else's attempt to get a price matched (and she rejected it on one of the grounds they could have used to reject mine).

And a strange side note: their computer system doesn't calculate the extra 10%. The salesperson has to do that in their head (or find a calculator) and then type in the revised price. So if you do get them to match a price, pay careful attention to the price they enter to make sure they didn't make an error when figuring it out.

Monday 21 November - Get off Toronto's lawn!

The Occupy Toronto encampment in St. James Park has been found to be illegal and the occupiers have been ordered to vacate. Good, and it's about time.

Among the finger-waggling, drug overdoses, and occasional emissions of Marxist propaganda, the occupy movement has some valid points, as I'd discussed in a diary entry last month.

But that doesn't give them the right to occupy a public park. That doesn't give them the right to camp in the park overnight in direct violation of a city by-law. That doesn't give them the right to damage the park by their actions. That doesn't give them the right to interfere with the park's neighbours' (both residential and commercial) use and enjoyment of their own properties. And it certainly doesn't give a few hundred people, claiming to speak for the 99%, the right to interfere with the rights of the actual 99.99% (the approximate percentage of the City of Toronto's population which is not occupying the park) to have reasonable use and enjoyment of the park.

And the occupiers' claim that their right to free speech will be infringed if they can't set up a bunch of tents is clearly ridiculous. I've exercised my right to free speech before. Heck, I'm doing it right now as I type this. I've done it on Twitter and on Facebook. I've done it by writing letters to the editors of newspapers and to elected representatives. I've done it as part of a crowd of protesters in front of Queen's Park. None of these expressions of free speech required a tent. Neither do the occupiers need a tent in order to exercise their free speech rights.

Speaking of elected representatives, who elected these people to speak on behalf of all but 1% of the population? I sure as heck didn't. In fact, I don't even remember them running for election or asking me to vote for them. They can legitimately claim to speak on their own behalf. They can reasonably legitimately claim that at least some of their views are shared by many people. But I'm pretty sure they don't have their claimed 99% of the population behind them. Whether or not I voted for the individuals who ended up being elected as my city councillor, my mayor, my MPP, and my MP (and I voted for some and not for others), they are the legitimate representatives of the public, having been democratically elected in free and fair elections in accordance with the rule of law. The occupiers? Not so much.

Friday 28 October - Good ideas gone bad

The political news in Toronto has been preoccupied this week with Mayor Rob Ford's 911 calls. He swore! He called names! He pulled the "Don't you know who I am?" trick! No he didn't! Yes he did! No he didn't! Well, as it turns out, other than one f-word (in a context completely different than what was portrayed in some media outlets, and for which he has since apologized), Ford didn't do what he was said to have done. We have the police chief's word on that, and while I don't see eye to eye with the chief on everything, his word is good enough for me in this case.

It used to be that you got your newspaper once a day, and the TV had a newscast two or three times a day, and the radio had a news report maybe every hour or two. And then we got CNN, broadcasting news 24 hours a day, and we got all-news radio stations, and we got news Web sites, and now we can find out what's going on almost as soon as it happens. Which all sounds like a good idea, but it turns out it comes with a serious downside.

Sure, in the Olden Days, there was competition between media outlets to scoop each other. But if you print a paper once a day, you have time to do some fact-checking before printing, and still scoop your competition. Now, if you take a few extra minutes to check facts, someone else will scoop you. And so we get situations like this one, where instead of waiting for confirmation, we get stories printed as fact which turn out to be speculation. And this whole story, from the initial event to the chief's statement, took four days and a bit. Even if the initial story had been 100% accurate, would it really have killed us to have to wait until the facts were actually available?

This ties in somewhat with my previous entry about how the Occupy movement says the system isn't working. In this case, it's the media system that isn't working. And there are other systems that have been twisted to the point where they no longer work the way they were supposed to.

Consider the stock market. The initial idea of stock markets was that they gave investors a place to buy and sell investments, including buying new stock from companies who needed to attract investments. Back in those days, you'd buy the stock of a company you thought was going to do well - gain in value, and perhaps also produce dividends.

Now? It's mostly investment companies doing massive trades (because, after all, if you're managing a multi-billion-dollar mutual fund, you're not making small trades; if you decide to sell half your holdings in company XYZ, that's going to be worth tens if not hundreds of millions of dollars, all in one trade). And a lot of it isn't even a human deciding whether company XYZ is worth buying or selling; a lot of it is computer programs set up to analyze technical data (nothing to do with the company's intrinsic value, simply a graph of how its stock price is moving) and buy or sell stocks that the program has determined are likely to move in a particular direction. That's not how the stock market was supposed to work, and individual investors have a hard time making money by investing in good companies because the huge automated trades distort the stock prices.

A friend of mine is a day trader. She used to have a regular day job like most of us, making widgets to sell or providing services or whatever. Productive stuff, contributing to GDP, producing products or services that are useful to other people or companies. But she quit that and now makes a very good living just buying and selling stocks and options. She's no longer productive; she no longer contributes to GDP; she no longer makes things that anyone wants or needs or provides services that anyone wants or needs. She's just shuffling paper around, and making way more money doing that than, say, the person who cleans your teeth (useful) or grows/raises the food you eat (useful) or builds the car you drive (useful). Granted, she pays her taxes on her profits, and she also gives a lot of her income to charities. But this isn't what the stock market was supposed to be for.

How about the commodities exchanges? Crude oil, for instance, was once traded on commodities exchanges so that companies which produced crude oil could sell it to companies which consume crude oil; the laws of supply and demand would determine the price. It's simple and efficient. But then someone realized "Hey, if I think the price of crude oil is going to go up, I can buy a bunch of it, even though I have no use for it, and sell it for a profit later!" And that's what commodities exchanges mostly do now: instead of connecting producers and consumers of commodities, they're simply places where investors can trade things of value. Never mind what this does to the actual market for the commodity.

And the commodity thing is layered. Gasoline is also traded, and it's also used as an investment vehicle rather than as an actual product that is produced by one party and consumed by another. At least in the Toronto area, for the last several years, the daily retail price of gasoline has been set largely based on the price of gasoline on an American commodities exchange, translated into Canadian dollars at whatever the day's exchange rate is. Never mind that the gasoline you buy likely never passed through the commodities exchange, either when it was oil or when it was gasoline; never mind that the gasoline you buy at a major oil company's station may have gone all the way from pump to gas station without ever leaving that one company. The oil companies could make a profit selling you gasoline at a much lower price, one that was based on their actual cost of production plus a markup. But they're companies, and their goal is to maximize profit, so why would they sell to consumers for a price that's less than what they could get if they sold the product on the commodities market? They wouldn't, of course; it would make no sense. And so when traders play with the price of oil and/or gasoline on the commodities market, we all pay more for our gasoline.

And then there are the futures and options and derivatives adding even more layers. You can buy or sell these on just about anything. And again, they originally served a legitimate purpose. For instance, if you need to buy oil two months from now, but don't want to risk the price changing significantly in the meantime, you buy a futures contract, which gives you certainty as to what price you will pay for your oil and gives the counterparty certainty as to what revenue they will get for their oil. And again, they've been twisted; they're now mostly used by traders who have absolutely no intention of ever possessing the oil itself, but rather simply see these things as items that can be bought and sold in the hopes of making a profit. And again, for those who actually do need to buy or sell this stuff, the price is no longer set by supply and demand for the actual product; it's pushed all over the place by traders.

I believe it's too late to put any of these genies back in the bottle. Too bad, cuz all this stuff is really messing things up for the people and businesses who are actually trying to do something productive.

Tuesday 18 October - Occupy Toronto

It's hard to say exactly what is up with the Occupy [insert place name here] movement, since it has no defined leadership and each participant is free to protest whatever they like and demand whatever they like. But the main underlying idea is that something is wrong with the system. And they're right.

The notion of "99%" has become a major part of the movement. This is that the top 1% are taking a greater and greater share of the economy, while the remaining 99% are having a tougher and tougher time of it. The job losses, the home foreclosures, the destruction of retirement savings - the 99% have had to worry about these, while the 1% have come through just fine.

There's a good point to it. The 1% run the big companies, sit on each others' boards of directors, approve each others' raises and bonuses, and exert disproportionate influence on politicians due to the huge financial resources at their disposal. Essentially, they set the rules not only for the 99%, but even for themselves.

For example, pretty much every large company says it has to pay above-average executive compensation in order to attract and retain the best executives. Well, one problem with this is immediately obvious: they can't all be above average. For an average to exist, some must be above it, and some must be below it. Each time one company gives its executives a big raise to put them back above the average, it raises the average that all of the other companies use to decide how much of a raise their executives need to be above-average. Yes, executives should be paid more than (say) the janitor who mops the bathroom floors or the warehouse clerk who moves boxes of widgets from A to B; their jobs have more impact on the company's wellbeing and demand more education and expertise. But the ratio of executive compensation to everyone else's compensation has increased dramatically over the years, to obscene levels, and it would be awfully hard to come up with a solid argument to explain why a company whose executives maybe needed to be 10x better (as measured by compensation) than other employees a few decades ago now need to be 100x better.

And the other problem with it? Well, consider the executives of companies like Lehman Brothers, AIG, Merrill Lynch, Fannie Mae, Freddie Mac, Washington Mutual, and Wachovia, which all essentially went under due to being extremely poorly run, and GM and Chrysler, which would have gone under if not for being bailed out by the taxpayer. How much do you want to bet that every one of those had a policy of paying high executive compensation in order to attract and retain high-quality executives? And did it work? No. Their executives sent those companies right down the toilet. If I did that to a company, I'd be fired; when an executive does that to a company, they either get to keep their job, or they get a severance package that's even more generous than their regular pay.

I'm definitely not part of the 1%. I don't draw a seven- or eight-figure salary. I don't have a corporate jet to take me to my private vacation island in the Caribbean. I don't have a gold-plated pension; in fact, I don't have a pension at all, other than the very modest Canada Pension Plan. My net worth dropped almost 20% from its pre-recession peak to its low point (and that would have been worse except that a significant part of it is the value of my home, which didn't plummet like the stock market did). A graph of my income during the recession has a similar shape to a graph of the stock market during the recession. So I'm part of the 99% they claim to speak for.

Do they speak for me? Not entirely. There are anti-capitalism signs among them, yet I like capitalism. Heck, I'm self-employed, which is a very capitalist thing to do: my employment income varies directly with how successful (or not) my business is. I don't think the whole system needs to be thrown out. But it does need to be reformed. In the U.S., a major part of the problem is that the government left the banking sector to regulate itself, with predictable consequences; that's much less of an issue here. But our 1% certainly puts its own interests first just like in the States, treating employees and investors as a second class. And there's a whole raft of other things, including the stock market itself, that no longer serve the original useful purpose for which they were intended.

I don't honestly think the protesters will manage to effect any meaningful change. Certainly, I have no expectation that corporations will pay any attention; they haven't paid attention to similar suggestions from the media, from activist shareholders, etc. And I don't think the politicians will start paying attention to a ragtag bunch of people camping in a park and waving signs when they could instead be paying attention to their friends and generous supporters.

But good on the protesters for their (mostly) peaceful (mostly) lawful attempt to draw attention to the problem.

Thursday 13 October - If tech firms made cars ...

What would your car be like if Microsoft, RIM, and Apple made cars?

Microsoft Car

Most people drive Microsoft cars even though nobody really loves them. Each new model weighs twice as much as the model before it. One out of every two or three new models sucks and everyone hates it; the next one is what it should have been in the first place.

Every few models, Microsoft moves the steering wheel to a different location. Once in a while, a service pack makes the functions of the accelerator and brake pedal trade places. You need to go back to driver's ed each time you get a new Microsoft car, because it's so different from the previous one. The car crashes a lot.

You can replace parts like the tires any time you want, but once you've replaced more than a couple of items, the car warns you that you have to re-register it with Microsoft or else it will stop working after 30 days.

RIM Car

People who drive RIM cars like them a lot, but wonder why they're not at the cutting edge like older RIM cars were in their day. Every now and then, the car suddenly stops working for a few days (but the Check Engine light never comes on).

You're free to buy and install any options you want ... but there are only a handful of options on the market. They promise there will be more soon.

Apple Car

Apple car owners love their cars, and endlessly annoy their friends by trying to make them switch, too. When Apple introduces a new car, half of their customers line up overnight to try to be first in line to buy one, and the entire customer base has upgraded within a few days.

Apple cars are so simple to use that you don't need to take driver's ed. There are no controls, just a touchscreen. The touchscreen can't function as both a steering wheel and pedals at the same time; you have to tap an icon in the lower left corner to switch between them. Once in a while, it misinterprets your instructions, so even though you wanted to turn at the next street on the right, it turns the heat right up.

Apple cars will only take you to approved destinations; they don't go to strip clubs or liquor stores, and while you used to be able to choose from dozens of different whoopee cushions for your Apple car, they were all banned a little while later. You can't buy things like gas or tires for an Apple car at a gas station or a tire dealer; you can only buy them at the Apple store. The owner's manual doesn't tell you that the car keeps a log of everywhere you drive, because that's none of your business.

Monday 10 October - It's a zoo!

I would pay extra to visit the zoo on an adults-only day. Imagine not having to try to look and take pictures through filthy handprints on every piece of glass. Imagine not being shrieked at all the time. Imagine not being run into randomly. Imagine not having most of the space in front of most exhibits taken up by strollers and wagons.

And what's wrong with kids these days such that a kid needs an iPad to keep them occupied at the zoo? Are lions and tigers and bears (oh my!) not interesting enough any more?

Friday 30 September - Leafs TV HD

I realized today that Leafs TV HD is part of my cable package, as a result of some changes that they made for me several months ago. So I watched tonight's game, and I have to say I'm very much unimpressed.

The video is awful. It suffers from quite a bit of DCT noise and macroblocking (both being signs of an excessively low bit rate) as well as mosquito noise and excessive sharpening. I have no way of knowing whether this is a problem with Leafs TV HD itself, or if it's a result of Rogers compressing their signal, as BDUs are prone to do.

There were two different types of audio problems, too. One that could be either a Leafs TV HD problem or a Rogers problem is that the audio dropped out frequently, for up to several seconds at a time. This isn't a signal problem on my cable link, as the video was almost always unaffected. The other is a strange mixing decision by Leafs TV HD. Typically, for sporting events broadcast in 5.1, the broadcaster will put their on-air crew in the centre channel, with ambient sound (crowd noise plus the sound of the game itself) spread around the other four main channels. Leafs TV HD, on the other hand, puts the announcers and almost everything else in the centre channel, leaving the other four speakers almost entirely unused.